Mauritius will face a negative growth of 6.8% in the best-case scenario according to the forecasts of the International Monetary Fund (IMF).
Mauritius will face a negative growth of 6.8% in the best-case scenario according to the forecasts of the International Monetary Fund (IMF). However, this forecast was made before the extension of the lockdown of the country and thus does not take into consideration the extended lockdown period between the second fortnight of the month of April and 1st June 2020, stated the Minister of Finance, Economic Planning and Development, Dr Renganaden Padayachy, today, at the National Assembly, in Port Louis.
The Minister was replying to a Private Notice Question on the economic impact of the lockdown from March 2020 to-date on the Mauritian economy. Thus, a noticeable downturn is to be expected and it is on the basis of which we have established, at national level, more realistic scenarios than those predicted by international instances, he pointed out.
Speaking about estimates for Mauritius, the Minister stated that there will be a downturn at the level of the country’s GDP ranging from 7% to 11% for 2020, and, as the lockdown and the global sanitary crisis persist, it is expected that the country will record an economic downturn of more than 10%. In terms of unemployment, if nothing is done, Mauritius could see its number of the unemployed increase by 150% for a total of 100 000 active non-employed workers, that is, 17.5% of the active population, he highlighted. This would represent an increase of around 60 000 of unemployed persons across Mauritius, he said.
Commenting the economic impact on different sectors on 2020, the Minister noted that the estimated positive growths for the agricultural sector will be between 1% and 1.5%, and for ICT, between 2 and 3% with drops in several sectors. The construction sector could nevertheless experience positive growth of 3% to 4%. According to him, a positive growth rate for the finance sector is expected to be 2% in the optimistic scenario, and will be less 7% in the pessimist scenario. No growth is estimated in the professional and administrative sectors.
Government is closely monitoring the situation with regard to the impact of the pandemic on the GDP and on sectorial and employment growth rates, Dr Padayachy pointed out. The estimates will be adjusted by taking into consideration the current situation in which the country finds itself, he indicated. Government, he recalled, has already in a proactive manner implemented several measures to sustain key sectors of the economy and will continue to maintain its recovery strategy with regards to protecting employment. He further reassured that the relaunching of the economy and investment will be at the fore of the 2020/21 Budget.
Moreover, the Minister highlighted that the economic impact of restrictions linked to fighting the Covid-19 pandemic is in constant evolution and is not final. At the global level, the latest forecasts of the IMF, relies on a strong downturn of global growth in 2020 at the rate of 3% and this in the best of cases. More than 150 countries will face a negative economic growth.
For him, in the face of the global lockdown, the risk of a sustainable recession is very much real. In this prospect, the global GDP might undergo a violent downturn way beyond the expected 6% forecasted by the IMF in its worse scenario, he said. One thing is certain, the world economy will not come back on track anytime soon and at any rate not before 2024, he added.
Source: Government of Mauritius