Mauritius WT/TPR/S/198/Rev.1 
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I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. The Republic of Mauritius, an island nation, is s ituated in the Indian Ocean, 2,200 km off the 
south-eastern coast of Africa.  With a landmass of 2,040 km2 and a population of almost 1.3 million, 
Mauritius has a high population density  of around 618  persons per km2 (up from 588 in 2001);  its 
population growth rate has been decreasing from around 1.0% per year in 2001 to 0.7% in 2006.  The official language of Mauritius is English, but French is also widely spoken. 
2. Mauritius has a relatively diversified, export-orie nted economy that continues to be based on  
four pillars:  sugar, textiles and clothing, tourism, and financial services subsectors.  This structure is 
the heritage of preferential access to certain key ma rkets, as well as the incentive schemes (mainly the 
Export Processing Zone (EPZ) Scheme), which he lped to boost export-oriented manufacturing 
(Chapter III(3)(iv), Chapter III(4)(i), and Chapter IV(3)).  Nevertheless, since the last TPR of 
Mauritius, the relative importance of these four pill ars has continued to change, with sugar loosing 
ground, and textiles and clothing suffering a serious set-back due to multilateral trade liberalization.  
However, after a contraction in production, the textil es and clothing subsector seems to be adjusting to 
the new economic environment (Chapter IV(3)).  T ourism has continued to perform well.  Increased 
international competition has made Mauritius rela x its policy, which was originally focused on 
up-market tourism.  Moreover, Mauritius seems to have develope d a niche industry in its global 
business sector, which replaced the offshore sector a nd appears to be growi ng rapidly (Chapter II(5) 
and Chapter IV(5)(i)).  Efforts are also being made  to develop Mauritius into a cyber-island and to 
make information and communication technolog y (ICT) the fifth pillar of the economy. 
3. Mauritius is an upper-middle-income country.  In its 2006 Human Development Report, the 
UNDP ranked Mauritius the highest among the sub-Saharan African countries, and 63
rd in the overall 
ranking.  Its GDP per capita is around US$5807 (up from US$3,788 in 2001) (Table I.1).  The services sector is the most important in terms of contribution to GDP (nearly 70% in 2006).  The 
sector is dominated by financial services and tourism, which has become the single largest source of 
foreign-exchange earnings, before sugar.  Manufacturing contributes about one fifth to GDP and some 
69% to the total value of merchandise exports (down from 75% in 2001); textiles and clothing 
account for around one third of manufactured production.   Sugar remains a leading agri-industry.  The 
diversification strategy has continued to contribute  to a decline in the im portance of agriculture 
(Table I.1).  The fisheries subsector remains sma ll, and exploitation has been depleting traditional 
resources.  Nevertheless, the Government pl aces high hopes on this sector and promotes the 
development of value-added fisheries and seafood-re lated activities. The mining and quarrying sector 
is not developed.   
4. The exchange rate of the Mauritian rupee is  market-determined.  Mauritius accepted the 
obligations of Article VIII of the Agreement of the International Monetary Fund (IMF) on 
29 September 1993.
1  The 50% surrender requirement on suga r exports, reintroduced in 2000, has 
been phased out.  Mauritius' external debt is mana geable;  its debt service ratio stands at around 6% 
(down from 7% in 2001).2 
                                                      
1 IMF (2006). 
2 Ratio of principal and interest payments to exports of goods and non-factor services. WT/TPR/S/198/Rev.1 Trade Policy Review 
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Table I.I 
Mauritius at a glance, 2001-07 
 2001 2002 2003 2004a 2005a 2006a 2007b 
Mid-year population ('000)c 1,200.2   1,210.5   1,223.1   1,233.7   1,243.5   1,253.0   1,253.0   
GDP at market  prices (US$ million) 4,545.8   4,755.8   5,546.0   6,327.8   6,341. 0   6,608.5   7,320.3   
GDP per capita (US$) 3,787.6 3,928.9 4,534.3 5,129.2 5,099.2 5,274.2 5,806.6 
        
Share of GDP at current prices (per cent)        
   Agriculture, hunting, forestry and fishing 7.3 6.3 6.4 6.5 6.0 5.5 4.8 
         Sugarcane 4.0 3.1 3.3 3.5 3.2 2.8 2.3 
         Other 3.4 3.2 3.0 3.0 2.8 2.7 2.5 
   Mining and quarrying 0.1 0.1 0.1 0.1 0.1 0.1 0.0 
   Manufacturing 23.3 22.4 21.5 21.0 19.8 20.1 19.8 
         Sugar 1.2 1.0 1.0 1.1 1.0 0.9 0.7 
         E.P.Z products 11.6 10.8 9.6 8.6 7.4 7.5 7.7 
         Other 10.5 10.6 10.9 11.3 11.4 11.7 11.4 
   Electricity, gas and water supply 2.2 2.4 2.5 2.3 2.1 1.9 1.8 
   Construction 5.5 5.7 6.0 5.8 5.6 5.6 6.1 
   Services 61.5 63.1 63.6 64.4 66.4 66.8 67.3 
   Wholesale & retail trade; repair 11.5 11.7 11.2 11.4 12.1 12.3 12.1 
          Wholesale and retail trade 11.0 11.1 10.6 10.7 11.4 11.5 11.4 
          Other 0.5 0.6 0.6 0.6 0.7 0.7 0.7 
  Hotels and restaurants  7.4 7.1 6.9 7.4 7.7 8.5 9.2 
  Transport, storage and communications  12.9 13.5 13.4 12.9 12.6 12.1 11.8 
  Financial intermediation 8.8 9.1 10.0 9.8 10.3 10.4 10.6 
         Insurance 2.4 2.6 2.7 2.8 2.9 2.8 2.8 
         Other (mainly banking including offshore) 6.4 6.7 7.3 7.0 7.4 7.6 7.8 
  Real estate, renting and business activities 9.0 9.3 9. 5 9.7 10.2 10.5 11.0 
         Owner occupied dw ellings 4.5 4.6 4.7 4.8 5.0 5.0 5.2 
         Other 4.5 4.7 4.8 4.9 5.2 5.5 5.8 
  Public administration and defence; social 
  security 6.4 6.5 6.8 6.9 7.1 6.7 6.4 
  Education 4.3 4.5 4.6 4.6 4.8 4.6 4.5 
  Health and social work 2.9 3.0 3.2 3.3 3.4 3.5 3.4 
  Other  community, social and personal  
service   activities 3.2 3.4 3.5  
3.5  
3.7  
3.8  
3.8 
 Financial Intermediation Services Indirectly 
Measured (FISIM) -4.9 -5.0 -5.6 -5.1 -5.5 -5.6 -5.6 
Exchange rate used for US$ 29.07 29.96 28.38 27.75 29.23 31.15 31.37 
a Revised. 
b Forecast. 
c End of year for 2005. 
Source:  Republic of Mauritius, Central Statistics Office, historical data. Viewed at: 
 http://www.gov.mu/portal/sit es/ncb/cso/hiseries.htm. 
 
5. Mauritius is a high-cost country;  the average wa ge continued to increase at an annual average 
rate of 7.5% during 2001-06, well above the rate for labour productivity, which has averaged only 
2.7%.  This differential, even more pronounced in the case of the textiles industry (where the average 
wage grew at an annual average of 8.7%, while th e labour productivity grew only at an average of 
0.2%), has been eroding the competitiveness of Ma uritian products.  Additi onal challenges to the 
economy include the changing international environm ent and the related increase in competition in 
Mauritius' major traditional export markets (the EC in particular), labour market rigidities, its ageing 
population, its meagre domestic market, and its in sularity.  The ongoing reforms aim to gradually 
dismantle the dualism in the economy and improve competitiveness (through, inter alia , trade 
liberalization and reducing the leve l of taxation, and investment in education and infrastructure). 
(2) RECENT ECONOMIC DEVELOPMENTS  
6. Mauritius is facing a "triple shock" after two decades of strong economic growth.  Preference 
erosion, following multilateral liberalization of trade in textile and clothing ite ms, and the reform of 
the EC sugar regime, together with soaring intern ational oil prices, has been challenging Mauritius' 
economic performance.  As a result, its economic growth has been somewhat slowing down.  Since Mauritius WT/TPR/S/198/Rev.1 
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the last TPR of Mauritius in 2001, the economy has gr own by some 3.3% per year (on average);  the 
weak performances in 2002 (1.9%) and 2005 (1.2%) were due to the contraction of the EPZ sector  as 
well as unfavourable climatic conditions, which a ffected sugar production (Table I.2).  Recent 
reforms have nevertheless revive GDP growth, estimated  at 3.9% in 2006 and 5.6% in 2007.  This has 
been based mainly on the strong growth in the servi ces sector and the recovery of the textile industry. 
Table I.2 
Main economic indicators, 2001-07 
 2001 2002 2003 2004a 2005a 2006a 2007a 
Miscellaneous Annual % changes 
Real GDP at market prices 2.6 1.9 4.3 5.8 1.2 3.9 5.6 
   Agriculture, hunting, forestry, and fishing 7.0 -16.3 1.9 8.1 -5.4 0.6 -6.8 
   Mining and quarrying -5.9 -49.0 1.0 0.4 -3.6 9.1 -5.0 
   Manufacturing 4.4 -2.4 0.0 0.6 -5.5 4.0 3.5 
   Electricity, gas, and  water supply 10.7 1.5 8.2 4.0 3.8 4.0 3.1 
   Construction 5.2 6.3 10.2 0.5 -4.4 5.2 15.0 
   Services 5.4 5.5 5.6 6.7 6.7 6.2 .. 
      Wholesale & retail trade; repair 3.2 3.2 1.2 5.7 5.6 5.2 4.4 
      Hotels and restaurants 1.2 3.1 3.0 2.4 5.6 3.5 13.1 
      Transport, storage, and communications 9.1 7.7 6.6 8.1 7.7 7.4 7.7 
      Financial intermediati on -8.5 5.8 11.7 4.3 5.4 7.0 7.3 
      Real estate, renting and busin ess activities 7.7 5.9 6.6 6.7 6. 5 6.3 7.5 
      Public administration and defence, compulsory   
social security 3.9 6.1 5.6 4.3 5.3 4.0 1.2 
      Education 4.0 6.1 4.8 6.4 6.1 4.1 2.4 
      Health and social work 5.5 9.0 6.8 7.0 6.2 7.9 4.0 
      Other  community, social and personal service 
activities 5.7 6.5 6. 3 7.6 7.2 6.5 7.8 
      Financial intermediation services indirectly 
measured (FISIM) -14.9 9.6 7.6 -0.4 7.3 6.9 7.3 
Inflation 5.4 6.4 3.9 4.7 4.9 8.9 8.8 
Nominal effective exchange rate (1995 = 100) ..  .. .. .. .. .. .. 
Real effective exchange rate  ..  .. .. .. .. .. .. 
Unemployment rate (per cent) 6.9 7.3 7.7 8.5 9.5 9.1 8.5 
National accounts Annual % changes 
Final consumption expenditure 3.4 3.7 4.7 7.2 7.1 5.5 4.0 
    Households 3.2 3.3 5.1 7.8 7.3 5.9 4.5 
    General government 4.4 5.8 3.0 4.6 6.1 3.8 1.1 
Gross domestic fixed capital formation 4.7 -0.1 10.3 2.2 -1.9 19.2 4.2 
    Private sector 0.1 -0.6 -1.8 16.3 -0.3 15.3 17.5 
    Public sector 16.3 1.0 36.6 -19.8 -5.4 28.4 -24.6 
Change in inventories .. .. -46.5 84.1 .. 170.6 .. 
Gross national savings 28.4 27.4 25.2 22.7 17.4 16.9 16.6 
Exports of goods & services 15.6 -12.1 -3.9 -0.3 10.6 7.7 5.1 
    Goods ( f.o.b. )  13.2 -11.5 -5.9 -3.5 8.9 10.1 -5.7 
    Services  19.4 -13.0 -0.7 4.3 13.0 4.6 20.1 
Imports of goods & services 3.0 -3.2 -3.1 2.8 6.4 9.3 -1.2 
   Goods ( f.o.b. )  0.6 -2.9 -4.3 3.9 5.5 11.1 -4.8 
   Services 9.4 -4.2 -0.1 0.1 8.4 5.1 8.3 
External sector US$ million  
 Trade account -239.5 -206.2 -309.8 -380.3 -689.7 -810.2 .. 
     Exports (f.o.b.) 1,552.5 1,600.0 1,908.4 1,971.1 1,961.5 2,171.3 ..  
     Imports (f.o.b.) -1,792.0 -1,806.1 -2,218.2 -2,351.4 -2,651.2 -2,981.5 ..  
 Current account  146.1 248.9 127.4 50.3 -214.3 -326.6 ..  
 Current account (% GDP) 3.2 5.2 2.3 0.8 -3.4 -5.1 ..  
 Capital and financial account - 90.6 -258.9 -201.1 -42.5 114.6 131.2 ..  
 Net international reserves 1,087. 1 1,353.4 1,735.2 1,608.9 1,482.1 1,954.5 ..  
     In months of imports of goods and non-factor 
services 4.6 5.8 6.7 5.4 4.3 5.0 .. 
External public debt (June) 234.0 293.2 325.2 307.1 315.0 0.0 ..  
Debt service as % of GDP  (June) .. 4.4 5.4 5.0 5.3 5.4 ..  
Government finance (fiscal year) % of GDP 
Total revenue and grants 18.2 18.4 20.2 20.3 20.1 20.1 19.6 
     Table I.2 (cont'd) WT/TPR/S/198/Rev.1 Trade Policy Review 
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 2001 2002 2003 2004a 2005a 2006a 2007a 
Total expenditure and net lendi ng 23.9 24.5 26.5 25.7 25.1 25.5 23.8 
Overall deficit (-) / surplus (+), after grants -5.7 -6.1 -6.3 -5.3 -5.0 -5.3 -4.1 
Monetary sector (end of period) Annual % changes 
Money supply 16.2    17.5    12.4    15.8    9.9    8.5    .. 
Quasi-money 10.8    12.5    10.9    13.2    14.2    10.0    .. 
.. Not available. 
a Revised. 
Source: Republic of Mauritius (undated), Central Statis tics Office, historical data. Viewed at: 
 http://www.gov.mu/portal/sit es/ncb/cso/hiseries.htm. 
 
7. During most of the period under review, m acroeconomic policies have contributed to 
containing inflation.  On a calendar-year basis, in flation (measured by changes in consumer prices) 
was maintained at under 6.5% per year till 2006, when it rose to 8.9%.  The main contributors to this 
increase include higher oil prices (resulting from increase in world prices and the introduction of the Automatic Pricing Mechanism (Chapter III(4)(b)), high er prices of alcoholic beverages and cigarettes 
(resulting from the increase in excise duties) and of some other products (resulting from the reduction 
of subsidies for rice, flour, and bread), increase in freight costs and depreciation of the Mauritian 
rupee.  During 2007, inflation increased further to reac h 10.7% in June (on a yearly basis), the highest 
in over a decade.  According to the BOM, this w as due to the second-round effects of high oil and 
commodity prices, the depreciation of the Rupee, and the increase in excise duties. 
8. Labour market rigidities have resulted in real wages growth exceeding increases in 
productivity.  This, together with lack of new em ployment opportunities, has continued to increase 
unemployment, which rose from 6.8% in 2001 to some 9.5% in 2005, the highest rate since 1986 
(8.5% in 2007).  The Government is working to  improve wage flexibilit y and implement labour 
market reforms focused on training and re-skilling programmes.
3 
9. The central government fiscal deficit remained  high (above 5% of GDP) throughout most of 
the period under review.  However, it was estimated  to have decreased to 4.3% in 2006/07 and is 
expected to remain at around 3.8% in 2007/08.  This reduction is due to the revival of economic 
growth, and increased public revenue, as well  as an improvement in tax administration4, and control 
of expenditures (including reduction of subsidy payments5).  The measures that have contributed to 
the increase in tax revenue include simplification of  the tax structure (reduction of maximum rates and 
bands), a rise in the income exemption threshold, th e removal of tax credits and tax holidays, mainly 
through the elimination of several incentive schemes, a rise in the excise duties on some products, and 
introduction of some new taxes (such as the Solid arity Levy on the turnover of hotels, hotel 
management, and tour operators, and the new Sp ecial Levy on banks starting 2007/08).  Other 
measures to further increase government revenue in clude the introduction of a National Residential 
Property Tax, effective September 2007, and the te rmination of corporate tax exemptions under the 
Freeport Scheme, effective 1 July 2009.  Tariff rat es have been lowered considerably, leading towards 
efficiency in duty collection.  Relatively low econo mic growth and high fiscal deficits contributed to 
public debt of 71.3% of GDP in 2005/06, projected to decrease to 69.5% in 2006/07  and 65.5% in 
2007/08.   
                                                      
3 IMF (2007).  
4 Including the new Pay As You Earn (PAYE) cumulative system introduced by the 2006/07 Budget,  
and the Tax Arrears Payments Incen tive Scheme (TAPIS) and the Voluntary Disclosure Incentive Scheme 
(VDIS) introduced by the 2007/08 Budget. 
5 After the substantial increase of subsidies in 20 05/06 to MUR 1,203.6 million, the subsidies were 
reduced again to 706.3 million in 2006/07. Mauritius WT/TPR/S/198/Rev.1 
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10. The primary objectives of the monetary policy are still to maintain price stability and promote 
orderly and balanced economic development.  In December 2006, the Bank of Mauritius (BOM) 
introduced a new framework for the conduct of the monetary policy.  Under this framework, the 
Lombard rate was replaced with the key Repo Rate  as the key policy rate to signal changes in the 
monetary policy stance.  The BOM sets the key Repo  Rate and monitors the supply of reserve money 
such that the overnight inter-bank money market inte rest rates move close to the key Repo Rate.  The 
key Repo Rate was initially set at 8.5% per annum , but was increased to 9.25% on 2 July 2007 in 
response to higher inflation, and lowered to 9.0%, effective 6 February 2008.  The BOM lends money 
to banks at the ceiling of the "corridor", i.e. at  50 basis points above the key Repo Rate, while it 
absorbs excess funds at the floor of the "corridor",  i.e. at 50 basis points below the key Repo Rate.  
With effect from 18 December 2006, the Lombar d rate was abolished and the Lombard Facility 
renamed.  Under the current Standing Facility (w ithout any borrowing quota), the BOM continues to 
be the lender of last resort and provides a collateraliz ed overnight facility to banks.  The interest rate 
chargeable on the Standing Facility is set at 400 basis points above the key Repo Rate.6  In addition, 
the independence of the BOM has been increased (C hapter IV(5)(i)(b)), and a BOM Monetary Policy 
Committee (MPC) established.7  The latter became operational in April 2007 and is in charge of 
formulating and determining monetary policy.  The MP C is expected to meet at quarterly intervals, 
and have interim meetings when the need arises. 
(3) TRADE AND INVESTMENT PERFORMANCE  
11. Mauritius' goods and services trade has been the equivalent of around 120% of its GDP (on 
average) since 2001, reaching close to 135% in 20 06.  This reflects the importance of trade for 
Mauritius' economy, given its small domestic market and its limited natural resources, including land.  
Mauritius has traditionally run merchandise trade a ccount deficits, which have occasionally (2001-03) 
been offset by its traditional su rpluses on the services account.  As a result, its external current 
account was in surplus from 2001 to 2003 and has been in deficit since then;  the capital and financial 
account has generally recorded the opposite trend (T able I.3).  Net international reserves represented 
between 5 and 7.5 months of prospective merchandi se imports during 2001-05, but were estimated to 
have decreased to 4 months in 2006/07, reflecting mainly the weak export performance (due to the 
loss of trade preferences) and soaring world oil prices. 
Table I.3 
Balance of payments, 2001-07 
(US$ million) 
 2001 2002 2003 2004 2005 2006a 2007b 
Current account 275.9 249.4 95.3 -115.7 -324.4 -611.1 -68.2 
  Goods and services 195.0 144.8 72.4 -151.5 -377.2 -734.1 -268.5 
    Goods -217.5 -211.2 -300.7 -582.1 -797.2 -1,087.9 -551.2 
     Exports f.o.b. 1,631.0 1,798.7 1,900.3 1,996.7 2,143.3 2,339.2 989.4 
      General merchandise 1,564.5 1,724.8 1,827.1 1,916.6 2,003.5 2,179.2 914.0 
      Goods procured in ports by carriers 66.5 73.9 73.3 80.0 139.8 160.0 75.5 
     Imports f.o.b. -1,848.6 -2,009.9 -2,201.0 -2,578.7 -2,940.5 -3,427.0 -1,540.7 
      General merchandise -1,819.9 -1,980.0 -2,164.7 2,523.4 -2,870.3 -3,344.5 -1,500.0 
      Goods procured in ports by carriers -28.6 -29.9 -36.3 -55.3 70.2 -82.6 -40.7 
     Services (net) 412.5 356.0 373.1 430.6 420.0 353.7 282.8 
      Credit 1,222.7 1,148.4 1,279.2 1,453.0 1,617.9 1,674.3 1,001.3 
        Transportation 235.2 274.7 335.1 372.9 384.3 363.5 196.8 
          Passenger 197.1 216.9 263.4 300.3 317.9 298.4 165.0 
          Freight 12.6 17.6 24.0 28.2 29.0 27.0 5.8 
          Other 25.6 40.2 47.8 44.3 37.4 38.1 26.0 
        Travel 623.6 611.7 695.8 852.7 871.4 1,007.3 610.6 
     Table I.3 (cont'd) 
                                                      
6 Bank of Mauritius (2006a). 
7 Article 54 of the Bank of Mauritius Act 2004. WT/TPR/S/198/Rev.1 Trade Policy Review 
Page 6 
 
 
 2001 2002 2003 2004 2005 2006a 2007b 
         Business 155.9 226.9 244.2 329.6 367.7 367.0 228.6 
         Personal 467.7 384.9 451.7 523.1 503.7 640.3 382.0 
        Other services 363.8 262.0 248.3 227.4 362.1 303.5 193.9 
         Private 359.6 259.3 241.9 221.0 352.9 295.4 186.3 
         Government 4.2 2.6 6.4 6.3 9.3 8.1 7.5 
      Debit -810.1 -792.4 -906.2 -1,022.3 -1,197.9 -1,320.6 -718.6 
       Transportation -260.8 -306.7 -400.3 -469.5 -523.1 -535.5 -288.3 
          Passenger -18.0 -19.4 -19.8 -22.0 -20.4 -20.4 -11.6 
          Freight -140.8 -144.3 -164.7 -213.6 -247.4 -257.7 -120.1 
          Other -102.0 -142.9 -215.8 -233.9 -255.3 -257.3 -156.6 
        Travel -198.0 -204.1 -216.3 -254.9 -275.0 -328.5 -162.2 
         Business -14.9 -33.2 -26.2 -13.8 -24.9 -14.3 -6.5 
         Personal -183.1 -170.8 -190.2 -241.1 -250.1 -314.1 -155.7 
        Other services -351.3 -281.6 -289.6 -298.0 -399.9 -456.7 -268.1 
         Private -340.3 -264.1 -258.8 -280.0 -395.2 -452.0 -265.0 
         Government -11.0 -17.5 -30.8 -18.0 -4.7 -4.7 -3.1 
  Income 13.5 13.2 -29.9 -14.2 -8.1 51.5 148.3 
        Credit 74.6 80.0 46.7 51.6 144.8 377.2 367.0 
         Compensation of employees 0.6 0.6 0.6 0.7 0.6 0.7 0.3 
         Direct investment income 2.3 5.1 2.7 4.0 4.6 2.3 0.6 
         Portfolio investment income 0.7 3.0 3.4 3.5 3.4 3.6 3.9 
         Other investment income 71.0 71.2 40.0 43.4 136.2 370.6 362.2 
          Monetary aut horities 68.8 70.6 38.7 42.4 46.8 53.3 32.5 
          General government 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
          Other 2.1 0.6 1.4 1.0 89.4 317.3 329.7 
        Debit -61.1 -66.8 -76.6 -65.7 -152.9 -325.7 -218.7 
         Compensation of employees -6.4 -8.1 -9.1 -9.3 -9.3 -10.1 -4.7 
         Direct investment income -5.0 -9.9 -23.4 -13.4 -33.6 -88.1 -3.8 
         Portfolio investment income -3.3 -11.6 -6.7 -9.0 -17.2 -23.0 -22.7 
         Other investment income -46.4 -37.1 -37.3 -34.0 -92.9 -204.5 -187.6 
          Monetary authorities -0 .5 -0.2 -0.4 -0.5  -0.6 -0.5 -0.2 
          General government -10.2 -7.2 -7.6 -7.6 -8.8 -8.9 -4.0 
          Other -35.7 -29.7 -29.4 -26.0 -83.4 -195.0 -183.3 
  Current transfers (net) 67.4 91.4 52.7 50.0 60.9 71.6 52.1 
      Credit 193.7 195.1 163.1 168.4 162.1 179.6 115.4 
        Private 182.5 174.6 148.1 146.3 145.8 162.3 106.1 
        Government 11.2 20.6 15.1 22.0 16.3 17.3 9.3 
      Debit -126.2 -103.7 -110.4 -118.4 -101.2 -108.0 -63.3 
        Private -118.6 -96.8 -109.9 -114.3 -95.3 -102.0 -60.9 
        Government -7.7 -6.9 -0.5 -4.1 -5.9 -6.0 -2.4 
Capital and financial account -198.8 -258.5 -134.1 32.1 306.6 345.2 -169.1 
    Capital account -1.4 -1.9 -0.9 -1.6 -1.8 -2.6 -1.0 
    Financial account -197.5 -256.5 -133. 3 33.7 308.3 347.9 -168.1 
      Direct investment -28.5 23.5 67.6 -20.5 -6.0 95.2 145.9 
          Abroad -2.8 -8.6 5.5 -31.7 -47.5 -10.1 -10.7 
          In Mauritius -25.6 32.1 62.1 11. 2 41.6 105.3 156.6 
      Portfolio investment (net) -19.3 -17.4 -17.9 -37.9 -16.3 -27.7 70.4 
       Assets -17.6 -18.3 -27.1 -53.0 -41.9 -110.6 -40.2 
        Equity securities -17.6 -18.3 -27.1 -48.4 -41.9 -110.6 -40.2 
        Debt security 0.0 0.0 0.0 -4.6 0.0 0.0 0.0 
       Liabilities -1.7  0.8 9.2 15.1 25.6 82.9 110.6 
        Equity securities -8.9 -0.6 8.1 19.1 35.9 34.9 18.5 
        Debt security 7.1 1.4 1.1 -3.9 -10.3 48.0 92.2 
      Other investment -194.8 77.7 39.5 60.9 164.9 136.1 -44.1 
          Assets -338.3 -106.9 -22.2 -56.8 -229.8 -371.7 -285.3 
           General government 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
            Banks -62.4 -20.5 16.7 -48.4 -193.5 -340.7 -218.4 
            Other sectors: long-term 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
            Other sectors: short-term -275.8 -86.4 -38.9 -8.5 -36.2 -30.9 -66.9 
          Liabilities 143.5 184.6 61.7 117. 8 394.7 507.8 241.2 
           General government -114.7 34.9 -8.5 -7.7 9.7 -19.4 53.0 
            Banks 0.5 91.9 4.8 60.4 6.2 -5.6 45.5 
            Other sectors: long-term -50.6 -99.0 -81.5 -75.5 34.4 29.0 -29.0 
     Table I.3 (cont'd) Mauritius WT/TPR/S/198/Rev.1 
 Page 7 
 
 
 2001 2002 2003 2004 2005 2006a 2007b 
            Other sectors: short-term 308.3 156.7 146.8 140.6 344.4 503.7 171.6 
      Reserve assets (increase -) 45.1 -340.4 -222.4 31.2 165.7 144.2 -340.3 
Net errors and omissions -77.1 9.1 38.9 83.5 17.8 265.8 237.3 
a Revised estimates. 
b First half; provisional estimates. 
Source: Bank of Mauritius (2006), Annual Report Year ended 30 June 2006 . Viewed at: http://bom.intnet.mu/pdf/Research 
 _and_Publications/Annual_Report/AnnualRep2006/CON TENTS.htm, and Bank of Mauritius (2007),  Monthly 
 Statistical Bulletin , September. Viewed at:  http://bom.intnet.mu/pdr/Res earch_and_Publicat ions/Monthly
 _Statistical_Bulletin /Sep2007/Table48.pdf.  
(i) Trade in goods and services 
12. Manufactures account for the bulk of Mauritian merchandise exports (ar ound 70% of the total 
value).  Despite its decreasing share, clothing rema ins the main manufactured export;  its share in the 
total value of merchandise exports fell from 57% in 2001 to 36% in 2006 (Table AI.1 and Chart I.1).  
However, the share of telecommunication and sound recording and reproducing apparatus and 
equipment increased significantly, from around 1% during 2001-05 to 12.2% in 2006, due to the re-
export of mobile phones to the UAE;  neverthel ess, these exports were decreasing again in 2007.  
Sugar has remained the main ag ricultural export, contributing around 16% to total merchandise 
exports. 
13. Imports continue to be dominated by manuf actured products, though their share has been 
decreasing gradually from around 70% of the tota l value of merchandise imports in 2001 to around 
63% in 2006.  Leading imports are machinery and tr ansport equipment (around 30% of the total value 
of merchandise imports, up from 23% in 2001), radio/television transmis sion apparatus, textiles, and 
chemicals (Table AI.2).  Even though textiles rema in an important import item, their share decreased 
from around 20% in 2001 to around 7% in 2006.  Tari ff reforms in recent years have helped to 
increase the level of imports, but not significantly affected their structure.  The upward trend of the share of imports of fuels in total imports reflects, to a large extent, continuous increases in their world 
prices. The 2006 increase in imports of transport equipment reflects the purchase of two planes by Air 
Mauritius. 
14. The EC is the major destination for Mauritian exports (Table AI.3 and Chart I.2);  it imports 
the bulk of Mauritius' sugar and a large share of its textiles and clothing items.  The United Kingdom remains the major single destination, followed by  France and the United States.  As the bulk of 
exports are denominated in euro or euro-zone curre ncies, the appreciation of the euro has positively 
affected Mauritian exports:  the total value of exports to the EC has been increasing steadily 
throughout the period under review. 
15. The sources of Mauritius' imports are more dive rsified than its export destinations.  The EC 
supplies around one third of the total value of Mauritius' merchandise imports.  During the period 
under review, South Africa has (on average) been the biggest single source, followed by France, 
India, and China.  The shaire of South Africa has, ho wever, declined gradually.   This decline has been 
compensated by the rise in the shar e of India (Table AI.4 and Chart I.2).  The share of Middle East 
countries (Bahrain, Saudi Arabia, and United Arab Emirates) has increased considerably, reflecting 
mainly the increase of oil prices. 
 
 WT/TPR/S/198/Rev.1 Trade Policy Review 
Page 8 
 
 
0%20%40%60%80%100%
2000 2001 2002 2003 2004 2005 2006
0%20%40%60%80%100%
2000 2001 2002 2003 2004 2005 2006Chart I.1
Structure of merchandise trade, 2000-06
(a) Exports, including re-exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3).Semi-manufacturesBeet or cane sugar Office machines and 
telecommunication equipment Fish, prepared, preserved
Textiles Other agriculture Other Clothing
Electrical machines Iron and steelFish Chemicals
Textiles Other agriculture
OtherOther semi-manufactures
Fuel Non-electrical machinesTransport equipment
 
 
 Mauritius WT/TPR/S/198/Rev.1 
 Page 9 
 
 
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%200120022003200420052006Chart I.2
Direction of merchandise trade, 2001-06
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%200120022003200420052006(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3).Germany Saudi Arabia Other AsiaChina South Africa America
Japan France Other Africa
Finland Bahrain IndiaItaly United Arab EmiratesAsia Other EC(25) United States
Other United Kingdom Madagascar
France Other Africa
Other EC(25) United Arab Emirates Other
 WT/TPR/S/198/Rev.1 Trade Policy Review 
Page 10 
 
 
16. Mauritius is a net exporter of services (Table I. 3).  Earnings from se rvices exports have 
continued to increase compared with those from goods;  services exports represent over 70% of the 
total value of merchandise exports, up from 50% at  the time of the last TPR of Mauritius.  Net 
services exports have also continued to show an up ward trend since 2001.  This is attributable to 
tourism, which contributes the largest and increasi ng part of earnings from services exports.  Net 
earnings from tourism have generally exceeded overall net services exports, indicating an offset of the 
deficit on trade in the other services (including transport). 
(ii) Investment 
17. Socio-political stability, a polyglot population, a relatively diversified economy, and recent 
economic reforms have helped attract investment in to Mauritius.  During 2001-06, the average ratio 
of gross domestic fixed capital formation (GDFCF) to GDP at market prices was around 23% (estimated at around 24% in 2007), with the private sector accounting (on average) for around 70% (73% in 2007).  Private investment is estimated to  have grown by 8.1% in 2007 after growth of 15.4% 
in 2006, mostly attributable to large investments in hotel projects.
8  These have had a considerable 
effect on the construction subsector, whose growth  rebounded by 5.2% in 2006 and 15.0% in 2007. 
18. The share of foreign direct investment (FDI) in GDFCF increased constantly from 3.1% in 
2001 to 14.4% in 2006.  Annua l FDI inflows into Mauritius averaged US$83.0 million, up from 
US$29 million over 1993-97.  In 20 06, FDI amounted to US$227.8 million, mainly due to increases 
in the banking and tourism subsectors.  Since 2001, banking has attracted the highest FDI on a 
relatively constant basis, followed by tourism and manufacturing (mainly EPZ textiles and clothing 
industries) (Table I.4).   
19. The United Kingdom, South Africa, and France ha ve been the major sources of FDI into 
Mauritius.  One-off relatively high investment has been recorded from India (2005), Switzerland 
(2006), United States (2004), and Luxembourg (2005).  
Table I.4 
Foreign direct investment, 2001-07  
(US$ million) 
 2001 2002 2003 2004 2005 2006 2007 
Total foreign direct investment in Mauritius 32.1 32.7 70.5 65.3 95.2 227.8 185.7 
By sector        
  Tourism 0.0 3.3 3.7 4.4 18.2 82.3 111.6 
  Banking 20.6 10.5 46.6 11.3 15.4 110.7 43.7 
  Telecommunication 0.0 0.0 0.0 1.4 5.9 1.4 0.5 
  Export processing zone 0.1 1.4 2.8 9.0 3.6 2.8 2.0 
  Other 11.4 17.4 17.4 39.2 52.1 30.5 27.9 
By country of origin        
  United States 0.1 1.0 1.3 18.8 2.5 5.1 56.3 
  United Kingdom 0.0 5.2 6.2 5.2 19.6 120.5 52.3 
  UAE 0.0 0.3 1.6 0.4 0.3 3.6 21.5 
  France 0.9 7.7 11.9 18.1 18.9 20.5 18.5 
     of which: Reunion Island 0.0 0.0 6.2 0.2 4.4 4.0 2.1 
  Switzerland 9.4 0.0 0.1 1.5 5.0 18.4 12.9 
  South Africa 20.6 11.1 36.6 0.7 0.9 1.2 7.7 
  India 0.0 0.1 5.1 5.5 22.7 5.0 0.5 
  Malaysia 0.0 1.0 2.5 0.0 0.0 0.0 0.5 
  Singapore 0.0 0.4 0.0 0.0 0.0 0.0 0.4 
  Luxembourg 0.0 0.0 0.0 1.1 12.5 1.1 0.3 
  Germany 0.0 0.1 0.0 3.5 1.6 5.6 0.2 
  Hong Kong,  China 0.0 0.3 0.0 0.1 0.2 0.9 0.2 
  Pakistan 0.0 0.0 0.0 0.0 1.7 1.6 0.0 
  China 0.0 0.6 1.2 0.0 1.3 0.2 0.0 
     Table I.4 (cont'd) 
                                                      
8 The significant increase in private investment in th e tourism subsector in 2006 and 2007 seems to be 
linked to the taking-off of projects under the Integrated Resort Scheme. Mauritius WT/TPR/S/198/Rev.1 
 Page 11 
 
 
 2001 2002 2003 2004 2005 2006 2007 
  Panama 0.0 0.0 0.0 0.5 0.1 0.4 0.0 
  Other 1.2 4.8 3.9 10.0 7.8 43.6 14.3 
Direct investment abroad 2. 8 9.3 41.4 35.3 65.8 35.8 10.8 
By sector        
  Tourism 0.0 0.0 4.9 15.3 32.8 12.3 3.1 
  Manufacturing 0.0 8.2 1.5 3.7 8.7 10.6 2.4 
  Banking 1.6 0.0 15.8 0.0 0.0 0.0 0.0 
  Other 1.2 1.1 19.3 16.3 24.3 12.9 5.3 
By host country        
  Mozambique  2.0 0.0 18.7 9.2 18.0 8.5 3.3 
  Madagascar 0.1 7.9 1.7 7.1 6.6 9.2 2.0 
  Seychelles 0.0 0.0 20.4 2.7 3.0 5.9 1.8 
  Maldives 0.0 0.0 0.0 12.1 27.4 3.4 1.0 
  India 0.0 0.0 0.0 0.0 0.0 0.1 0.9 
  France 0.2 0.1 0.3 1.7 2.8 0.2 0.7 
     Of which: Reunion Island 0.2 0.1 0.3 1.3 0.8 0.2 0.1 
  South Africa 0.0 0.0 0.3 0.2 0.0 0.4 0.1 
  United States 0.0 0.0 0.0 0.4 0.0 0.0 0.0 
  Other 0.5 1.2 0.1 1.9 7.9 8.1 1.0 
Source:  Bank of Mauritius, Monthly Statistical Bulletin , various issues. Viewed at :  http://bom.intnet.mu/. 
20. After a drop to MUR 83 million in 2001 (fro m MUR 333 million in 2000), outward FDI from 
Mauritius has been on an upward trend.  Tourism h as become the main subsector in which Mauritians 
invest abroad, overtaking manufacturing.  The evolution of outward FDI in manufacturing is partly attributable to regional integration of the Mauritia n manufacturing sector and delocalization of certain 
manufacturing activities (production of low-value textil es and clothing items, and sugar, in particular) 
to neighbouring countries due to increasing produc tion costs, particularly wages.  Mozambique 
(sugar), Maldives (tourism), Seychelles (tourism), an d Madagascar (textiles) have become the major 
destinations for outward FDI from Mauritius.  
(4) O
UTLOOK  
21. Prospects for economic growth in Mauritius de pend largely on continuation of the reforms 
that are adjusting the economy to the new global envir onment.  Pursuit of the reforms is to contribute 
to real GDP growth of around 4% in the medium term .  This is to be supported by strong growth in 
the services sector and recovery of the textiles a nd clothing industry.  With continued monetary 
discipline, after its surge in 2006 and 2007, in flation is expected to stabilize at around 5%.9 
22. The merchandise trade deficit is expected to  increase due to recent changes in the world 
economic environment.  However, the increasing su rplus on the services account, mainly due to the 
growth of tourism services, is expected to reduce the overall curre nt account deficit.  The central 
government budget deficit is expected to remain stab le at around 5.5% of GDP, and external debt to 
be contained at between 4% and 6%  of GDP.  Investments and savings should remain at their current 
levels. 
23. A decline in world oil prices and sustained grow th in the services sector could restore the 
external balance more quickly, and further boost economic growth.  However, a new surge in oil 
prices or higher-than-expected fiscal deficits would further deteriorate the current account and, ceteris 
paribus, lower the level of reserves.   
                                                      
9 IMF (2007).