Mauritius Eyes 'Rainy Day Fund' In 2012 Budget

By Editorial 06 October, 2011

Due to a deterioration in the global economy, Deputy Prime Minister and Finance Minister of Mauritius Xavier-Luc Duval has confirmed plans to provide for a special ‘Rainy Day Fund’ or ‘Fighting Fund’ in the country’s 2012 budget, designed to support strategic sectors currently in difficulty and to support employment and growth.

Defending the latest decision, Duval explained that the government aims to introduce a special fund to deal with the fallout from the international economic crisis on the strategic sectors in Mauritius, noting that the slowdown in the global economy is currently very worrying, and even more so as regards next year. Consequently, reflections on the 2012 budget must take into account this unavoidable reality, the minister stressed.

Given that different operators recently expressed their grave concerns regarding the economic situation in Mauritius, in a bid to encourage the finance minister to take the necessary measures to stimulate the economy, the country’s Joint Economic Council also recently underlined the need to regain both confidence and optimism.

The Mauritius Chamber of Commerce and Industry (MCCI) recently recorded a reduction in economic activity in the third quarter of this year, as gauged by its business confidence indicator.

Yet the Central Bank of Mauritius remains more optimistic than private operators, predicting growth this year of 4.4%, slightly down from the 4.6% growth forecast previously. Indeed, while conceding that inflationary pressures remain strong, the bank nevertheless insists that the situation as regards the labour market, tourism, and official reserves is encouraging.

Underlining that preparations for the 2012 budget are progressing well, Finance Minister Duval announced that the budget would be presented on November 4. The 2012 budget would, he revealed, centre around the government’s four priorities, notably favouring growth, improving the social protection system, strengthening the economy in case of global recession, and making the fiscal system more efficient, more effective, and fairer.

Key budgetary objectives outlined by the minister include plans to introduce fiscal measures to boost private investment and increase tax revenues, which are currently low due to growth. Other measures include plans to introduce social measures intended to increase the standard of living in Mauritius.

Tags: Expatriates | Tax | Investment | Economics | Business | Mauritius | Fiscal Policy | International Financial Centres (IFC) | Budget | Social Economy | Offshore | Social Security | Inflation |


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