Mauritius: Selected Issues

July 15, 2022

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Mauritius: Selected Issues, (USA: International Monetary Fund, 2022) accessed November 13, 2024

Summary

This Selected Issues paper reviews the fiscal rules framework in Mauritius with a focus on the calibration of the debt and budget balance ceilings. The paper concludes that a new medium-term debt anchor could be up to 80 percent of gross domestic product (GDP) compared to the anchor of 60 percent of GDP repealed during the pandemic. Introducing a short-term operational rule based on the overall fiscal deficit ceiling of around 3 percent of GDP would help reduce debt from 99.2 percent of GDP in FY2020/21 to close to the anchor by FY2026/27. The revised debt anchor would better reflect Mauritius’ debt carrying capacity while supporting growth. However, the current level of debt stands well above the proposed anchor. A transition period could be considered during which the deficit would gradually decline from 7.6 percent of GDP in FY2021/22 to 3 percent of GDP in FY2026/27 and beyond. Debt sustainability risks should continue to be assessed on the IMF’s Debt Sustainability Assessment tools regardless of whether the debt anchor has been met.

Subject: Asset and liability management, Environment, Financial services, International organization, Monetary policy, Public debt

Keywords: B. financing climate change, Central bank policy rate, Climate change, Climate change expenditure, Climate finance, Debt anchor, Debt limits, Debt rule, Financing gap, Global, Monetary policy transmission

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2022/224
Stock No:

1MUSEA2022002
ISBN:

9798400214844
ISSN:

1934-7685

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