Colacelli said real gross domestic product (GDP) grew by 3.2% in 2025, supported by continued strength in services, including tourism plus financial services, while construction contracted. Growth is projected to slow to 2.8% in 2026, with spillovers from the war in the Middle East expected to weigh most heavily on tourism.
Inflation picked up during 2025 partly due to policy-related price increases, then eased in early 2026 within the Bank of Mauritius target range of 2% to 5%. Inflation is expected to rise again in 2026 due to higher international fuel plus food prices, before moderating through 2027.
The external current account deficit is estimated to have widened in 2025, while foreign reserves increased to $10.3 billion at the end of 2025. Colacelli warned that a prolonged war in the Middle East could further weaken growth plus external balances, with higher energy plus food prices potentially lifting inflation expectations.
Fiscal discussions focused on rebuilding buffers. The primary fiscal deficit, excluding grants, is projected to narrow to 3.5% of GDP in FY2025/26 from 6.5% of GDP in FY2024/25, driven mainly by higher revenues linked to the Fair Share Contribution. Public debt is projected to remain elevated at about 88% of GDP at end‑June 2026. Colacelli said fiscal sustainability will require stronger revenue mobilisation plus restraint in current spending, particularly pensions plus extra-budgetary transfers, while protecting vulnerable households through well-targeted support, including temporary measures responding to war-related price pressures.
Monetary policy was described as broadly appropriate, with the Bank of Mauritius expected to remain forward-looking plus ready to tighten policy if inflation expectations move above the target range. Colacelli also called for stronger implementation of the monetary policy framework plus safeguards for central bank independence, including prompt amendments to the Bank of Mauritius Act.
Colacelli said macro‑financial risks remain contained, while cross‑border activity exposures plus real estate risks warrant close monitoring. Colacelli also welcomed Mauritius becoming the first African country to subscribe to Special Data Dissemination Standard Plus, the highest tier of IMF data standards, describing the step as a signal of commitment to transparency plus data quality.
–IMF/ChannelAfrica–
