Monetary Policy Committee: Maintaining the Key Rate At 4.5

Harvesh Seegolam praised the role of the MPC during the pandemic. He added that committee members agreed that the lagged effects of past monetary actions were still transmitted to the real economy through various channels. “The Monetary Policy Committee assessed that the current stance of monetary policy remains favorable to price stability and orderly economic development. Accordingly, the MPC unanimously decided to maintain the key rate at 4.50% per annum,” said Harvesh Seegolam. The Governor of the Bank of Mauritius also announced that real GDP growth is expected to be above 7.0% in 2023. As for overall inflation, it is expected to end the year around 7% and reach 4%. by the end of 2024.

The global economy continues to recover, despite diverging growth trajectories from one country to another. In its October 2023 Global Economic Outlook report, the IMF forecasts global growth of 3.0% in 2023 and 2.9% in 2024. Inflation is slowing in most countries due to the continued decline commodity prices and easing supply chain conditions. The slowdown in headline and core inflation signals the likely end of central bank policy tightening around the world.

Domestically, the economy recorded commendable growth in 2023Q2. Labor market conditions improved during the year and unemployment maintained a downward trajectory. The growth dynamic is expected to be widespread and persist throughout the 2023-2024 period. Tourist arrivals are expected to return to pre-pandemic levels, with one of the highest receipts to date. The current account deficit is expected to narrow significantly, from 11.5% in 2022 to 5.6% in 2023. The construction sector will be supported by several private and public infrastructure projects. Household consumption spending will also improve thanks to the recovery in real wages and government policy support. Real GDP growth is expected to exceed 7.0% in 2023.

Short-term yields continue to move within the interest rate corridor. Conditions in the foreign exchange market are normalizing, with the exchange rate reflecting the fundamentals of the domestic economy and international market conditions. Investment flows from abroad are sustained and gross official international reserves (RIO) remain at a comfortable level of 10 months of import coverage. The banking sector remains strong and has sufficient capital reserves and liquidity.

L’inflation à Maurice s’est encore atténuée en octobre 2023, soutenue par la normalisation des chaînes d’approvisionnement mondiales et la baisse des prix des produits de base. Les pressions inflationnistes sous-jacentes, telles que mesurées par les mesures de l’inflation de base, se sont également atténuées. Avec une inflation en glissement annuel déjà inférieure à 5 %, la dynamique inflationniste fournit des signes concrets que l’inflation globale converge progressivement vers la fourchette cible de la Banque en matière d’inflation. L’inflation globale devrait maintenant terminer l’année aux alentours de 7 % et atteindre 4 % d’ici la fin de l’année 2024.