The current economic situation of Mauritius is not blooming so well. A GDP growth rate of 3.2% was noted for 2013 while, in 2012 it was 3.4%. 3.7% GDP growth rate has been predicted for 2014 by Statistics Mauritius. The economic growth rate depends on local sectors as well as international economies.
Currently, Europe is experiencing a growth but main partners of Mauritius like France is trying to avoid a double dip recession. Similarly, the economic situation in Asia is flourishing but India is facing depreciation in its currency, which is hereby affecting the tourism sector in Mauritius. Tourist arrivals from India have slid by 12.1% during November 2013.
To achieve the GDP growth of 3.7% in 2014, Statistics Mauritius made assumptions, for example, the sugar sector should increase production, the manufacturing sector should expand and the textile industry should grow by 2%.
However, to increase GDP growth in the future, more people have to be employed, the amount of capital invested should be increased, education levels should be given a boost, technology should be up to date; thus all these factors will lead to an increase in the productive capacity in the economy. Therefore, output can be enhanced in the economy giving consumers more disposable income, and providing resources for business to invest furthermore. To achieve higher levels of GDP, consumers need to limit consumption spending and increase savings, permitting business to invest more in capital goods. The savings rate should be reviewed higher to encourage more savings. To attain a higher economic growth in the future, resources should be invested in the present so as to generate a better economy and thus people will enjoy better standards of living.
In short, it can be noted that to increase one factor of the economy the other factors like employment, trade, investment, education and other main determinants of the economy should be tackled.
Unemployment rate in 2012 was 8.1% and a revised figure of 8.2% was projected by Statistics Mauritius in September 2013. There has been a rise in the rate of unemployment since 2012 and quite a considerable increase in youth unemployment has been noted.
Moreover, there has been a closure of 5 enterprises which led the number of export-oriented enterprises (EOE) to 319. This has steered to a fall in total employment in EOE while employment of foreign workers has increased by 3.6%. The EOE exports were 0.1 % lower compared to the third quarter last year whereas the EOE imports were higher by 1.5%. This clearly indicates a problem in trade especially in the manufacturing of goods for exports.
Private investment, which is more important in a country for job creation, has faced a downturn. The private sector investment as a percentage of GDP (excluding aircraft and marine) has suffered a decline from 17.5% in 2012 to 15.5% in 2013.
The decline in the GDP growth rate can be well illustrated due to all those economic problems faced locally and internationally. As mentioned a higher GDP growth is expected in 2014, to do so, the main macroeconomic pillars should be improved. Firstly, improve our work-force, create more jobs and to do so private investment should be injected in the economy; encourage production to increase output for export and consumption. The GDP growth rate cannot be obtained just by implementing the big projects but the root problem should be solved to attain the level forecast.