More active role encouraged for private sector as Mauritius adjusts
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Page 52
After nearly two decades of impressive economic performance, Mauritius has seen its growth slow in recent years because trade preferences for textile and sugar exports have been phased out and the cost of petroleum imports has risen sharply. Growth is projected to remain slow over the next two fiscal years, according to the IMF's annual economic review.
The country's current account is now in deficit, the real effective exchange rate has depreciated, and net foreign official reserves have declined, although they remain at comfortable levels.
On the fiscal side, a lack of adjustment of petroleum prices for six months (because of the temporary suspension of the automatic price mechanism) has undermined the overall fiscal position, which may deteriorate further in 2005/06.
The authorities recognize the need for fundamental reforms. To this end, IMF Executive Directors underscored the importance of a comprehensive strategy of structural reforms and policies geared toward macroeconomic stability. Specifically, Directors encouraged the authorities to explore a more active role for the private sector and emphasized the importance of creating a more flexible labor market to help workers transfer from declining industries to more dynamic ones. In the textile and sugar sectors, efforts to boost...
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