Mauritius: Selected Issues
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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debt anchor could be up to 80 percent of gross domestic product (GDP) compared to the anchor of 60 percent of GDP repealed during the pandemic.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.
Series:
Country Report No. 2022/224
Subject:
Asset and liability management Environment Financial services International organization Monetary policy Public debt
Frequency:
regular
English
Publication Date:
July 15, 2022
ISBN/ISSN:
9798400214844/1934-7685
Stock No:
1MUSEA2022002
Format:
Paper
Pages:
34
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