Mauritius bets on innovation to revive its struggling economy amid rising debt
Mauritius, renowned for its thriving tourism and sugar industries, confronts economic obstacles. Traditional sectors are faltering, and inflation is surging, with the rupee depreciating. The government, led by Prime Minister Navin Ramgoolam, is prioritizing economic diversification to ensure stability and long-term growth.
Patrick Gervais Assirvaden, president of the Labour Party and former head of the Central Electricity Board, is spearheading reforms. He aims to cultivate innovation-driven industries like ocean services, renewable energy, and tech to draw foreign direct investment (FDI).
The 2025-26 budget centers on economic renewal, fiscal consolidation, and a new social order. It includes initiatives to support R&D, innovation, and business growth. A May agreement with the UK over the Chagos Islands sovereignty has bolstered Mauritius' international standing and investor confidence.
Despite these endeavors, FDI in Mauritius dropped by 10% to $681 million in 2024, with greenfield projects down by 66%. Public debt hovers at about $12 billion, nearly 90% of GDP. Ramgoolam, in office for less than a year, faces public discontent despite implementing populist measures.
Mauritius' economic prospects hinge on successful diversification. With hurdles like high inflation, public debt, and declining FDI, the government's focus on innovation and international agreements is vital. The public's support will be pivotal as Ramgoolam navigates these complexities.
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