Port-Louis, Mauritius - The International Monetary Fund (IMF) estimates that the Mauritian economy will grow by 3.7% in 2014, subject to a strong growth in the seafood, information and communication technology as well as financial services sectors, PANA reported from the Mauritian capital Wednesday.
In his remarks to the media Wednesday in the nation's capital, Port-Louis, Martin Petri, Head of an IMF Mission to the island, said the growth rate is achievable 'if public investment is executed faster than projected or private investment accelerates'.
He expressed confidence that the economic situation in 2014 would be better than that of 2013.
Petri listed the challenges for Mauritius in 2014 as including: to reduce public debt through a smooth medium-term fiscal consolidation path, improve the monetary policy transmission mechanism by removing excess reserves, pursue public sector reforms while protecting the poor and address productivity and competitiveness challenges needed to raise medium-term economic growth prospects.
The IMF leader pointed out that in 2013, Mauritius maintained a stable macroeconomic environment despite difficult external developments.
'Overall economic performance in 2013 has been quite good as per international standards, despite that fiscal deficit has risen partly owing to spending in response to the March flash floods and larger than expected capital spending while inflation stood at a downwards trend,' he observed.
According to the IMF, inflation will remain subdued in 2014 at less than 4%, but Petri cautioned that the structural deficit of the current account remains a concern, especially in an environment characterised by more moderate growth, low national savings and declining market shares in some export sectors.
'Raising growth potential would require removing infrastructure bottlenecks through the provision of strong regulatory framework that encourages private sector involvement, improving the planning and implementation of the public investment programme, reforming state-owned enterprises sector, reducing the cost of doing business, closing the skill-mismatch and further strengthening educational outcomes as well as identifying niche markets for Mauritius,' Petri said.
Speaking on the low savings rate prevailing in the island, he said policies should be adopted to encourage national savings and foster competitiveness that will require longer-term adjustments to reduce fiscal deficits and to help build human capital and infrastructure.
The IMF mission also expressed concerns regarding constraints in the water sector, and said it is ready to provide support to the Mauritian authorities to address the issue.