Thursday, April 2, 2009

Mauritius cuts economic growth forecast on global crisis

PORT LOUIS, March 31 (Reuters) 

Mauritius cut its 2009 economic growth forecast to 2.5 percent, bringing it more in line with predictions by the International Monetary Fund and the Indian Ocean island's central bank. 

The government had previously been predicting 4 percent growth but analysts said the forecast looked too high given the likely fallout from the global economic slowdown on the island's key industries -- tourism and textiles. 

'On the basis of information gathered on key sectors of the economy, and measures announced in the stimulus package in December 2008 by government to cushion the adverse effects of the international financial and economic crisis on our economy, as well as delays noted in its implementation, GDP is now forecasted to grow by around 2.5 percent in 2009,' the Central Statistics Office said in a statement. 

Mauritius is one of Africa's most stable and prosperous economies. Annual growth leapt from 2.3 percent in 2005 to over 5 percent after a raft of reforms in 2006 to modernise the sugar and textile industries and boost investment in tourism, telecommunications and financial services. 

The IMF cut its forecast to 2 percent in February because of risks to economic growth and Central Bank Governor Rundheersing Bheenick told Reuters this month he had no reason to dispute this prediction. 

The central bank's official growth projection for 2009 is now 2-2.8 percent, down from 5.1 percent in 2008. 

The central bank cut its benchmark lending rate to 5.75 percent from 6.75 percent last week in reaction to the worsening economic outlook at home and abroad. 

Bheenick also said it was time for the government to consider a second stimulus package to bolster the economy. The government unveiled a $330 million package in December.