Moody's: Mauritius Up from Baa2 to Baa1

After the demonstration, since fiscal year of 2005/2006 to date, its ability to meet as scheduled maturities of its interest both in-capital, Maurice was on the waiting list of Moody's for a possible improvement in its rating. Since Tuesday, June 26, it's done. Mauritius has moved from Baa2 to that category of a Baa category.

The justification for this increase scoring is based on strengthening institutions, according to Moody's, will enable the national economy and public finance to mitigate the negative effects from the turmoil emanating from the euro area.

Moody's rating agency is a private. Like any rating agency, it specializes in the analysis of default risk of a borrower, that is to say its ability to repay under the terms of a loan.

In an economic environment where the use of intermediaries is not quite to the agenda, borrowers, including states, rely heavily on the result of an analysis of their creditworthiness as indispensable passport to negotiate concessional loans on the capital market.

More than anything, an increased rating is the equivalent of an increase in credibility. In the field of public debts, the amount borrowed does not matter. What matters is the ability to repay its debts. This is the argument to the Ministry of Finance to justify the use of debt to, among other things, invest in public infrastructure.

Indeed, the public debt service in terms of Gross Domestic Product (GDP) increased from 8.4% in 2005 to 1.9% in 2011 reveals a document from the Ministry of Finance. Another element that enhances the reputation of Mauritius, is the comparison of income per capita to that of debt per capita. Between 2005 and 2011, the first increased by 70% or 31% faster than the second.

"Mauritius has undertaken several measures including expanding its economic cooperation with China and India. She is about to exit a business model focused on the export of products whose manufacture does not require great skill to a service economy where a high level of expertise is essential, "said Aurelien Mali, Moody's analyst specializing on loans granted to States. He believes that the progress that Maurice record in this sector, will help offset its vulnerability to risk factors from abroad.

"This is great news," rejoiced, for his part, Xavier Luc Duval, Deputy Prime Minister and Minister of Finance. "Now, Maurice is classified as a large country like Russia, Bahrain, Thailand or Mexico. Best, Moody's indicates the criteria it uses to assign a rating us up. I pointed out two. These are measures taken to make our economy more resilient to possible investment in public infrastructure. It comes to show that we have used good measures. Moody's assesses the diversification of our economy and our strategy towards Africa. She appreciates our commitment to increase the countries with which it wishes to sign agreements for the abolition of the system of double taxation. These ratings give us the opportunity to further promote the image of Mauritius as a country where foreign investments are safe. It allows us to negotiate loans with better terms. "