Mauritius economy: Better times ahead.

The Island nation of Mauritius, known for its sugarcane plantations, and tourism, is finding its way out of the recession. Tourism being the major source of foreign exchange, was hit by the declining arrivals of foreign tourists. Apart from tourism, the country earns foreign exchange from the export of sugar, textiles, clothing, and food products.

The Mauritian economy that had grown at 5% in the last few years, is expected to reach only 2.70% this year, according to forecasts of the country’s Monetary Policy Committee. The IMF had projected a growth rate of 2% for the country in 2009. The official projection of 2.70% growth is based on a smaller import bill this year on account of the fall in oil prices globally. Apart from imports of oil, the country sources its other requirements like foodstuffs, chemicals, machinery and equipment, mainly from India, and China, while it counts on France to pick up the bulk of its exported products.

China has now come to play an important role in the country’s economy, with the establishment of the China Trade Zone, that is expected to boost exports by about USD 200.00 million per annum. The balance of trade deficit is slowly narrowing with the fall in oil prices.

Restoration of the exports sector is vital for the Mauritian economy to grow and prosper. As a matter of fact, the upbeat mood in the French economy is a welcome sign for the Island nation, that can look forward to more offtake of its products from France now. But it may be a bit premature to celebrate, as the recession in Europe and elsewhere will take some time to subside, and their economies look up once again.