Mauritiusfaces economic stagnation, credit rating risk
Mauritius, once a model of economic competence, now struggles with structural cracks exposed by COVID-19. The 2024 election promised reform but delivered slow progress, frustrating citizens and investors. With Moody's on negative watch and FATF review looming in 2027, the country risks losing its investment-grade rating. Key challenges include an ageing population, bloated welfare, bureaucratic inefficiency, and a financial sector in crisis. Tourism collapsed 11% during the pandemic, and authorities defended the rupee with reserves rather than allowing adjustment. Budget deficits exceeded 9% in 2023/24 and 2024/25, exposing vulnerabilities. Labour shortages, foreign exchange hoarding, and energy/water crises now dominate. While pension reform and Vision 2050 offer hope, Mauritius must urgently address connectivity, energy security, and institutional trust to avoid a downgrade.