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Economy of Mauritius

From Academic Kids

Mauritius has one of the strongest economies in Africa, with a GDP of $4.1 billion in 1997 and per capita income of $3,600. It is heavily reliant on exports of sugar and textiles, but tourism, offshore business, and financial services are growing. Independent surveys typically characterize the Mauritian business environment as among the best in Africa.

Economic performance has been impressive for the past 15 years, with real growth averaging 7% between 1985-90 and 5.4% between 1990-97. GDP grew 5% in 1997, with strong performances in all major sectors. Annual economic growth is likely to hover between 5% and 6% over the medium term; neither a recession nor a boom is forecast. Inflation was between 4 to 5% in 2003 and is likely to remain in single digits over the medium term. Unemployment is growing and has reached a level of about 10% in 2004, nearly double previous estimates. The upward trend is causing concern in a society grown accustomed to full employment. Chronic trade deficits are normally offset by surpluses in tourism and other services. The Mauritian rupee is freely convertible.

The economy faces daunting challenges. The country's two principal exports – textiles and sugar – rely on preferential access to markets in Europe and the United States. As World Trade Organization regulations come into force and textile quotas disappear, Mauritius will face increased competition from low-cost producers in Asia and South America. The price it receives for its sugar in Europe and the United States--two or three times the world market price--will almost certainly fall. Both industries are responding by placing more emphasis on productivity. Also, many of the country's most successful companies and banks are expanding outside the country and establishing operations in India and Africa. For its part, the government is encouraging investment in services with the goal of establishing Mauritius as a regional trade and financial center for commerce between Africa and the Far East.

There are about 275 textile factories in Mauritius exporting to Europe and the United States. Products range from simple garments to fashionable sweaters and other apparel sold in the finest shops. Raw material – yarn and fabric – comes primarily from India and the People's Republic of China.

The sugar industry comprises 20 estates, 17 mills, and 35,000 small planters. Production ranges between 600,000 and 650,000 tons per year. More than 90% is sold to Europe, the remainder to the United States. An increasing number of mills are investing in power plants fueled by coal and bagasse, the residue left from crushed sugarcane.

More than 90 hotels serve the tourism industry. They range from modest bed-and-breakfasts to five-star resorts. Tourist arrivals exceeded 500,000 in 1997 and are expected to reach 600,000 before the turn of the century.

Banking and other financial services form the most rapidly growing economic sector. Some 6,000 offshore companies were registered as of 1997. Freeport facilities, including warehouses, commercial exhibition space, and modern cargo handling systems, opened in 1997, primarily to serve trade between Asia and Africa.

GDP: purchasing power parity - $12.3 billion (1999 est.)

GDP - real growth rate: 4% (1999 est.)

GDP - per capita: purchasing power parity - $10,400 (1999 est.)

GDP - composition by sector:
agriculture: 10%
industry: 29%
services: 61% (1996)

Population below poverty line: 10.6% (1992 est.)

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 6.8% (1999)

Labor force: 514,000 (1995)

Labor force - by occupation: construction and industry 36%, services 24%, agriculture and fishing 14%, trade, restaurants, hotels 16%, transportation and communication 7%, finance 3% (1995)

Unemployment rate: 2% (1996 est.)

Budget:
revenues: $1.1 billion
expenditures: $1.2 billion, including capital expenditures of $NA (1999 est.)

Industries: food processing (largely sugar milling), textiles, clothing; chemicals, metal products, transport equipment, nonelectrical machinery; tourism

Industrial production growth rate: 3.5% (1999 est.)

Electricity - production: 1,225 GWh (1998)

Electricity - production by source:
fossil fuel: 91.84%
hydro: 8.16%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 1,139 GWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: sugarcane, tea, maize, potatoes, bananas, pulses; cattle, goats; fish

Exports: $1.7 billion (f.o.b., 1999)

Exports - commodities: clothing and textiles, sugar, cut flowers, molasses

Exports - partners: United Kingdom 32%, France 19%, United States 14%, Germany 6%, Italy 4% (1997)

Imports: $2.1 billion (f.o.b., 1998)

Imports - commodities: manufactured goods, capital equipment, foodstuffs, petroleum products, chemicals (1996)

Imports - partners: France 19%, South Africa 12%, India 9%, Hong Kong 7%, United Kingdom 6% (1997)

Debt - external: $1.9 billion (1998 est.)

Economic aid - recipient: $42 million (1997)

Currency: 1 Mauritian rupee (MauR) = 100 cents

Exchange rates: Mauritian rupees (MauRs) per US$1 - 25.485 (January 2000), 25.186 (1999), 22.993 (1998), 21.057 (1997), 17.948 (1996), 17.386 (1995)

Fiscal year: 1 July - 30 June

See also : Mauritius

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