Mauritius, a tropical island nation in the Indian Ocean, is making significant strides in the realm
The Mauritian government has unveiled an ambitious and forward-looking budget for the fiscal year 2024-2025, presented by Finance Minister Renganaden Padayachy. The budget aims to drive substantial economic growth, boost tourism, and improve the overall quality of life for Mauritians through a variety of innovative measures and reforms. Below is a summary of the budget speech for 2024-2025.
Economic Growth and GDP Targets
Mauritius has recorded a real GDP growth rate of 7% in 2023, with GDP at market prices increasing from MUR 571.1 billion in 2022 to MUR 651.7 billion in 2023. The government aims to propel Mauritius towards becoming a MUR 1 trillion economy by 2030. This ambitious target will be supported by creating a business-friendly environment, attracting higher levels of investment, and enhancing the employability and productivity of the labor force
Inflation and Employment
Headline inflation has decreased from 10.8% in 2022 to 7% in 2023, attributed mainly to lower energy and commodity prices globally. The government anticipates further easing of inflation to an average of 5.8% in 2024, driven by falling commodity prices, despite potential volatility in global oil and food markets.
The unemployment rate fell to 6.1% in 2023, the lowest in over 25 years. Government initiatives like the "Prime à l'Emploi" and the "Revenu Minimum Garanti" have significantly boosted youth employability. Inclusive measures to increase the participation of women and disabled individuals in the workforce are also anticipated to enhance employment levels further.
Tourism and Exports
Tourism has rebounded remarkably, with sector earnings reaching MUR 86 billion in 2023, a 36% increase from 2019, and the industry recovering to 94% of pre-pandemic levels. The government has set an ambitious target of 1.4 million tourist arrivals and MUR 100 billion in receipts for 2024, aiming to make Mauritius a green-certified destination by 2030.
Exports of goods and services also saw a significant boost, increasing by MUR 31 billion to reach MUR 347 billion in 2023. The manufacturing sector continues to show resilience, recording double-digit growth for the second consecutive year, with a particular focus on diversifying exports and enhancing competitiveness.
Investment and Financial Services
Foreign Direct Investment (FDI) inflows rose to MUR 37 billion in 2023, representing 5.7% of GDP, largely driven by real estate and diversified investments across various sectors. The financial services sector, contributing 4.4% growth in 2023, is set for further expansion with measures including the introduction of a 10-year expert Occupation Permit to attract foreign talent and the development of Mauritius as a Fintech hub.
Labor and Immigration Reforms
The budget introduced significant reforms to attract and retain skilled labor. The salary threshold for Occupation Permits (OP) for professionals was reduced from MUR 30,000 to MUR 22,500, with a streamlined process for work permits set at three weeks. Additionally, professionals with 10 years of experience can receive a temporary OP for three months pending approval, and non-citizens holding a Retired Residence Permit are allowed to work without additional permits.
Social Measures and Tax Reforms
The budget introduces significant social measures, such as increasing maternity leave to 16 weeks and paternity leave to four weeks, with special provisions for multiple births or premature babies. The monthly minimum wage will rise to MUR 20,000, improving the standard of living for many Mauritians.
In terms of tax reforms, the investment tax credit of 15% over three years will now include AI and patents, aimed at fostering innovation. Furthermore, the government has proposed several incentives to boost local manufacturing and exports, including support for SMEs to digitalize their operations and the establishment of retail outlets for Made in Moris products.
Sustainability Initiatives
The budget emphasizes sustainability, with plans for extensive coastal rehabilitation and the introduction of a Corporate Climate Responsibility Levy of 2% on profits for companies with turnovers exceeding MUR 50 million. These measures are expected to generate significant revenue to fund climate adaptation and mitigation projects.
Tourism and Infrastructure
The government aims to attract 1.4 million tourists in 2024, with receipts expected to reach MUR 100 billion. Initiatives such as fast-tracking the implementation of e-Gate and e-Passport systems and fostering sustainable tourism development are key components of this strategy, positioning Mauritius as a green-certified destination by 2030.
The 2024-2025 budget reflects a comprehensive strategy to stimulate economic growth, enhance social welfare, and position Mauritius as a competitive, sustainable, and inclusive economy on the global stage.
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