Mauritius’s Annual Inflation Accelerates on Food, Fuel Costs

Mauritius’s annual inflation rate rose to 7.2 percent in March, the highest in more than two years, on increased transport and food prices, the Central Statistics Office said.

Inflation quickened from 6.8 percent a month earlier and prices advanced 0.6 percent in the month, the Port Louis-based data agency said in a statement on its website today.

“On this trend, annual inflation might range between 9 to 10 percent by the end of June, which is a matter of concern,” Vishal Ragoobur, a senior economist at the Ebene-based Mauritius Employers’ Federation, said by phone.

The central bank and government will work together to contain inflation, Bank of Mauritius Governor Rundheersing Bheenick said on March 29. The benchmark interest rate was increased by half a percentage point to 5.25 percent on March 28 and Bheenick warned more effort may be needed to “normalize” rates. Finance Minister Pravind Jugnauth announced a day later that the tax on fuel would fall to allow for a cut in gasoline and diesel costs.

“Such measures, including price controls on basic commodities, will slow down inflation, not reverse the trend,” Ragoobur said. “Being a net importer of food and fuel, Mauritius has limited leeway” to contain rising prices, he said.