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Economic performance during 2002
INTRODUCTION
The purpose of this Aide-Mémoire is to highlight the economic performance of Mauritius during the year 2002 and prospects for 2003.
PERFORMANCE AND PROSPECTS
GDP growth for 2002 is now estimated at 3.3% as opposed to the 4.6% anticipated earlier. This downward revision has been prompted by lower sugar production and a reduction in prognosis for growth excluding sugar mainly on account of the growth estimate for the EPZ being markedly brought down. Table I shows GDP growth figures for the five last years.
Table I.
Sources of Growth |
|
1998
|
1999
|
2000
|
2001
|
2002
|
|
Gross Domestic Product, basic
prices |
%
|
5.7
|
2.3
|
9.3
|
5.8
|
3.3
|
|
Agriculture |
%
|
-1.5
|
-25.8
|
33.3
|
8.9
|
-11.2
|
|
Sugar
|
%
|
2.5
|
-43.9
|
64.5
|
13.4
|
-19.3
|
|
Manufacturing |
%
|
6.2
|
2.0
|
7.9
|
4.6
|
0.1
|
|
Export Processing Zone
|
%
|
6.9
|
6.0
|
6.0
|
4.4
|
-2.0
|
|
Tourism |
%
|
6.0
|
4.0
|
13.5
|
1.0
|
3.0
|
|
Construction |
% |
6.0 |
8.5 |
7.5 |
1.5 |
8.5 |
|
Banking/Financial Institutions
|
%
|
8.3
|
10.3
|
14.6
|
9.6
|
6.5
|
Although growth in 2003 should recover from its low base, prospects are still not bright given the structural problems of the country and the impending war on Iraq. Overall GDP, accordingly is expected to grow by around 5 % this year.
UNEMPLOYMENT
The latest official figure shows an unemployment rate of 9.8% in 2002. With indications of a continued upward trend in joblessness within a difficult economic context particularly in the EPZ, unemployment rate is estimated to have already exceeded the 10% mark and is expected to increase further by the end of the year.
Table II.
Employment |
|
1998
|
1999
|
2000
|
2001
|
2002
|
|
Total Employment, |
000's
|
475.0
|
480.5
|
483.6
|
490.8
|
490.0
|
|
Unemployment Rate |
%
|
6.9
|
7.7
|
8.8
|
9.1
|
9.8
|
|
Male
|
%
|
6.1
|
7.0
|
8.3
|
8.8
|
8.5
|
|
Female
|
%
|
8.5
|
9.0
|
9.6
|
9.8
|
12.2
|
INVESTMENT
The overall investment rate continues to decline and is estimated to be around 21.3% of GDP in 2002. The share of private sector's investment at around 67% is still well below the 1999 level of 76%. This is a cause of great concern given that an investment rate of 30% of GDP is deemed desirable to sustain a GDP growth of above 6%, with an advocated share of 80% of total investment for the private sector.
Table III.
Savings and Investment |
|
1998
|
1999
|
2000
|
2001
|
2002
|
|
Investment Rate |
%
|
23.2
|
27.6
|
23.5
|
22.3
|
21.3
|
|
Savings Rate |
%
|
26.2
|
25.8
|
25.8
|
28.4
|
27.1
|
PUBLIC FINANCE
Though budget deficit for the year 2002/2003 is expected to be below 6%, it still remains high. Public debt, on the other hand, is still on the rise reaching some Rs 100 billion as at September 2002 representing around 65% of GDP.
Table IV.
Public Finance |
|
97/98
|
98/99 |
99/00 |
2000/01
|
2001/02
|
|
Budget Deficit as % of GDP |
%
|
3.8
|
4.1 |
3.8 |
6.5
|
6.0
|
|
Total Public Debt as % of GDP |
%
|
60.9
|
63.0 |
66.3 |
64.3
|
63.5
|
INFLATION
The inflation rate of 6.4% as at June 2002, overshooting the authorities' initial target. It is estimated to recede to below 5.5% for the current financial year.
Table V.
Inflation |
|
1998
|
1999
|
2000
|
2001
|
2002
|
|
Inflation Rate |
%
|
6.8
|
6.9
|
4.2
|
5.4
|
6.4
|
MAIN CHALLENGES
The cumulative effects of non-satisfactory GDP growth for two consecutive years will make Mauritius much more vulnerable to external shocks.
The main economic indicators show that the economic transition of Mauritius will be difficult and painful and the economy is facing three main challenges:
JEC
18 March 2003