This is the conclusion of the latest Moody’s Ratings report on Mauritius. Moody’s has maintained the country’s Baa3 sovereign rating, with a stable outlook. This means that Mauritius remains investment grade. The country was last rated in July 2023. The Moody’s report highlights the continued high growth of the economy and the country’s political stability as the main strengths of Mauritius as an international financial centre.

Reasons for the rating

According to Moody’s, this rating is underpinned by a strong economic recovery. The country is seeing greater investment and has shown remarkable resilience to previous shocks. The rating agency also highlights the record levels of foreign direct investment recorded by the country in 2023. In the report Moody’s states that ‘while most FDI continues to flow into real estate projects, a large pipeline of real estate-related FDI will further stimulate economic activity.’

Another reason given by Moody’s is the progress made on fiscal consolidation. Fiscal indicators have improved faster than the rating agency had predicted, thanks in part to very high growth rates since 2022.

The third reason is the solidity of the country’s institutions and its resistance to external shocks. For Moody’s, Mauritius has demonstrated its ability to limit the long-term impact of external shocks on its economy through sound policies.

Mauritius has a high level of international reserves, equivalent to 12.9 months of imports, which gives it a degree of protection against external vulnerabilities. These reserves play a crucial role in the face of persistent current account deficits and potential terms-of-trade shocks.

Key figures

The Mauritian economy will grow by 5.9% in 2024, keeping the growth period above the country’s pre-pandemic trend.

Moody’s forecasts a very gradual reduction in public debt, from 65% of GDP in fiscal 2024 to 64% in fiscal 2025.

Moody’s notes that the government has introduced the Corporate Climate Responsibility Levy to increase its revenue base. ‘This levy will bring in Rs 5 billion, or 0.6% of GDP, in fiscal 2025… It will further increase government revenues to 25% of GDP in FY2024, significantly higher than the 21% of GDP in FY2019,’ Moody’s said.

Moody’s decision to maintain Mauritius’ Baa3 rating with a stable outlook reflects a balanced assessment of the country’s economic strengths and weaknesses. While Mauritius has solid economic growth and substantial international reserves, it must continue to manage its debt and environmental risk challenges while implementing structural reforms to support its long-term growth trajectory. The stability of the rating will largely depend on the country’s ability to maintain this positive momentum while addressing the structural and global challenges ahead.