STATEMENT BY THE HONOURABLE PRIME

MINISTER, PRAVIND JUGNAUTH, IN THE NATIONAL

ASSEMBLY ON THE IMF 2017 ARTICLE IV REPORT

1. Madam Speaker, an IMF mission visited Mauritius

during July 31 August 15, 2017 to conduct the
2017 Article IV consultation.

2. I have been informed by the IMF that on 17

November 2017, the Executive Board of the IMF
concluded the 2017 Article IV Consultation with
Mauritius without any formal Board discussion.

3. In its report, the IMF has highlighted the current

economic performance, the challenges and
proposed policy actions.

4. According to the report:

GDP Growth is projected at 3.9% for 2017 and at

around 4.0% over the medium term.

Economic activities are expected to remain

robust, driven by the Public-Sector Investment

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 Programme and supported by continued
dynamism in construction, the tourism sector and
financial intermediation activities.

Domestic demand will be sustained by

recovering business and consumer confidence,
and increased investment.

And international reserve buffers have improved

substantially.

5. In its report, the IMF notes that overall, banks are

well-capitalized, liquid and profitable; that many
recommendations of the 2015 Financial Sector
Assessment Program have been implemented; and
that financial stability surveillance and
macro-prudential policies have been strengthened
through empowering the Financial Stability
Committee.

6. The IMF also welcomes the Business Facilitation Act

as a step to improve Mauritius business
environment.

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7. The Report emphasises the need for a bold,
coordinated, strategic vision, guided by strong and
independent institutions to guide the economic
transition. It sees the formation of the National
Economic Development Board and the drafting of
the Financial Sector Blueprint as important steps
towards harmonising the policy direction and
implementation across sectors.

8. The IMF has also identified some risks and

challenges with regards to:

The slowdown of manufacturing exports.

Signs of inflationary pressures.

The impact of the ageing population.

A debt sustainability outlook which is

increasingly susceptible to a range of
macro-fiscal shocks.

The deficit in the current account of balance of

payments.

Excess liquidity in the banking system.

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 The Global Business Sector facing pressure
from international anti-tax avoidance initiatives.

And eroding cost competitiveness.

9. In view of the above challenges, the IMF has made

the following policy recommendations:

A tighter fiscal stance.

Further revenue mobilization efforts and

improvements in public investment management.

Improving the efficiency and impact of public

investment.

Mopping-up of excess liquidity.

Shoring up financial stability, including the

upgrading the macro-prudential policy
framework.

Broader structural reforms in areas such as the

labour market, higher education, innovation,
governance and anti-corruption policies.

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 Better aligning post-secondary education
curricula with the economys needs, encouraging
tertiary enrolment in Science, Technology,
Engineering and Mathematics (STEM) subjects,
and encouraging foreign skilled labour where
necessary.

And revisiting and simplifying the entire

wage-setting mechanism to improve
competitiveness.

10. Thank you, Madam Speaker.

P.K.J

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