Budget Highlights 2024 - 2025

The last budget of the incumbent government has been presented by the Hon. Dr Renganaden Padayachy in a context that is radically different to the ones presented in previous years. The country is on the brink of the general elections. Bold measures were taken in previous years against the backdrop of COVID-19 and a painstaking global inflationary episode. Indeed, the foundational pillars of our economy have been reinforced by past budget measures through a series of ambitious measures, aimed at reinforcing the purchasing power of our citizens, and the robustness of our economic growth rate, whilst building resilience to state-contingent macroeconomic shocks.

But challenges continue to linger. Mauritius is a small-open economy with a relatively high propensity to import. Furthermore, the pass-through parameter from global commodity prices and exchange rate developments to domestic prices is relatively high. Social challenges in the form of persistently high cost of living and erosion of purchasing power continue to undermine an important segment of the population.

While we have achieved stellar growth performance in 2022 and 2023, the 2024-2025 budget aims at fostering a more balanced and egalitarian development that would positively trickle down and benefit all citizens of the country by juxtaposing resilience with greater inclusiveness on a sustained basis. Various social measures like youth and women financial empowerment through the panoply of schemes announced are indeed praiseworthy.

Geriatrics have not been confined to oblivion either. The government ostensibly showcased its eagerness to support this category of the population through generous pension hikes. In a nutshell, we are of view that the announced social assistance measures across the board will help bring greater equality, horizontal and vertical equity, greater social fairness and justice. The budget also supports greater social justice and equitable access to public goods, with significant investments in the education and health sectors.

We believe that the economy is on track to achieving yet another year of strong performance. Tourist arrivals will exceed their pre-pandemic level, which should help buttress other sectors such as retail, trade, construction and real estate. The current account deficit is expected to narrow down further, on the back of improved trade balance and favorable primary income. The country will continue to reap the benefits of a larger pool of foreign exchange earnings to eliminate the depreciation bias plaguing the rupee.

We are also of opinion that, despite the array of social and capital spending measures, the economic growth momentum shall provide impetus to revenue mobilisation efforts and pave the way for gradual fiscal consolidation and create space necessary to engage in appropriate countercyclical policies where and when necessary, whilst keeping the public debt level in check at a sustainable level.

Policy measures proposed during the previous years centered around re-engineering our economic pillars towards some newly created sectors, whilst reinforcing traditional ones and being mindful of long-term structural challenges. The 2024-2025 budget was concocted with relatively more social narrative in mind, i.e., socially re-engineer the livelihood of the population through the restoration of their purchasing power and consolidation of their economic welfare.