News Karnataka
Wednesday, April 24 2024

Port-Louis: IMF raises concerns over Mauritius’s public debt

IMF slashes India's 2022 growth forecast to 7.4%
Photo Credit : IANS

Port-Louis: The International Monetary Fund (IMF) remains concerned over Mauritius’s public sector debt as a percentage of GDP, estimated at 92.4 per cent in fiscal year (FY) 2021-2022 and 88.1 per cent for FY 2022-2023.

According to the IMF’s Staff Report for the Article IV Consultation published on Saturday, Mauritius’s fiscal and debt position deteriorated significantly in FY 2020-21 due to the Covid-19 pandemic. The overall borrowing requirement increased to 23.1 per cent of GDP in FY 2020-21, as expenditures increased by around 8 per cent of GDP, mostly to address the pandemic.

Following the pandemic and geopolitical instabilities, debt vulnerabilities for Mauritius remain elevated. However, as the report points out, “the Mauritian authorities have worked on a plan for further fiscal consolidation to increase the resilience of the country to future shocks and reduce public debt levels in the medium term”.

For instance, the government has phased out almost all pandemic-related spending and plans to reduce public sector debt, recalibrating the medium-term debt anchor to 80 per cent of GDP, Xinhua news agency reported.

The public external debt is low at 24 per cent of GDP and remains less of a concern as it is primarily concessional, long-term and at a fixed interest rate.

According to the report, “improving competitiveness and addressing external imbalances would help to sustain the debt in the long run across all economic sectors”.

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