Mauritius

Mauritius, an island nation of 1.26 million people, has transformed from a low-income, sugar-dependent economy in the 1960s into an upper-middle-income country with a diversified economic base. Key sectors now include tourism, manufacturing, ICT, and financial services, the latter contributing 14% of GDP. Despite a sharp economic contraction during the COVID-19 pandemic that temporarily cost Mauritius its high-income status, the country is on a path to recovery, supported by strong governance, investment in education and infrastructure, and structural reforms that continue to drive resilience and growth.

Political Context

Mauritius is one of Africa’s oldest democracies, having held 13 general elections widely regarded as free and fair since the late 1960s. The country operates under a stable multiparty system, with political life shaped by long-established parties as well as smaller but influential movements. The 13^th general election held in November 2024, resulted in a decisive victory for the Alliance du Changement, a coalition bringing together the Labour Party, the Mauritian Militant Movement (MMM), the Mouvement Démocrate (MD), and Résistance et Alternative (ReA). The coalition secured 60 of 62 seats in the National Assembly for a five-year term. Dr. Navin Ramgoolam was sworn in as Prime Minister, on November 13, 2024. He also serves as the Finance Minister, Minister of Defense, Minister of Home Affairs and External Communications, and Minister of Rodrigues and Outer Islands Development.

Mauritius is a parliamentary republic in which the President serves as Head of State, while executive authority rests with the Prime Minister, who heads the government.

Civil liberties

Mauritius is rated “Free” in the 2024 Freedom House's annual assessment of political rights and civil liberties worldwide. The country performs strongly on a range of political and economic indicators compared with regional peers, and ranks favorably on the Corruption Perceptions Index, placing 56^th out of 180 countries.

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Growth moderated to 3.2% in 2025, reflecting the completion of major infrastructure projects and a slowdown in new investment, despite record tourist arrivals and continued expansion in financial services and ICT. The economy remains resilient to external shocks, although real GDP growth has decelerated amid weaker external demand and softening construction activity. Labor market conditions improved, with unemployment declining to a two-decade low of 5.6%, while wage growth moderated. The twelve-month average inflation rose to 3.7% by December 2025, driven partly by excise tax increases, although underlying price pressures remained contained. In February 2026, the central bank maintained the policy rate at 4.5%. External imbalances widened, with the current account deficit reaching 6.7% of GDP, reflecting front-loaded imports and continued weakness in goods exports, while strong financial inflows supported an increase in reserves. Fiscal pressures remain elevated.

Revenue measures introduced in late 2025, including a reduction in the VAT threshold and a tourist fee, raised revenues, while expenditure remained broadly stable as pension and social transfer reforms are being implemented gradually. As a result, the fiscal deficit remained high and public debt stood at around 89% of GDP. Growth is expected to moderate further to around 2.5% in 2026, reflecting subdued external demand and heightened global uncertainty.

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Since gaining independence in 1968, Mauritius has recorded strong economic growth, briefly attaining high‑income country status in 2020 and ranking as the second‑highest GNI per capita economy in Sub‑Saharan Africa. The economy is broadly diversified, with tourism, manufacturing, fisheries, and financial services as key pillars, reflecting a successful transformation from a monocrop economy into an upper‑middle‑income country with strong institutions and high human development outcomes. However, the COVID‑19 shock exposed structural vulnerabilities, including reliance on tourism, slowing productivity growth, and rising fiscal pressures.

Sustaining higher and more inclusive growth remains a challenge amid an aging population, skills mismatches, and declining competitiveness in traditional sectors, such as sugar and textiles. Mauritius continues to diversify its economy through financial and information technology services, fisheries, and the blue economy, while strengthening the foundations for innovation-based economic activities.

Climate change is emerging as a central development risk. Mauritius is highly exposed to cyclones, floods, coastal erosion, and water stress, with climate‑related losses estimated at around 0.8% of GDP annually. The Country Climate and Development Report highlights that climate impacts could significantly constrain growth, public finances, and livelihoods if adaptation and resilience investments are delayed. The transition to a low‑carbon, climate‑resilient economy offers opportunities to unlock new sources of growth, including renewable energy, the blue economy, and sustainable tourism.

With initiatives to increase women's workforce participation, address skill shortages, and improve financial services, Mauritius is poised to continue its development journey. Commitments to source 60% of energy from renewable sources by 2035, alongside success in high-value agricultural, underscore the country’s capacity to innovate and adapt.

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The World Bank Group's engagement in Mauritius is guided by a Country Partnership Framework (CPF) FY24-FY28, aligned with Mauritius’ National Vision 2030 and the government’s five-year program (2020–24). The CPF supports the country’s ambition to achieve high-income status by unlocking growth potential while strengthening inclusion and resilience. It focuses on accelerating growth, diversifying the economy, creating jobs, improving public sector effectiveness, and enhancing resilience to shocks, underscoring the WBG’s commitment to reducing poverty and boosting shared prosperity in the face of global challenges.

The Mauritius-Rodrigues Airport Project marks the first lending operation in many years and aims to unlock inclusive and sustainable growth opportunities in Rodrigues, an isolated island and autonomous region. By enhancing air connectivity, embedding sustainability, and fostering ecotourism, the project serves as a crucial economic enablerfor the island’s integration. It also creates job opportunities for youth, advances women's empowerment and supports a nationally significant investment that promotes inclusive growth, climate resilience, and regional connectivity.

The WBG maintains an active knowledge and advisory portfolio in Mauritius, providing technical assistance on tourism development, renewable energy, water management, insolvency and secured transactions, and strengthening the supervisory capacity of the Bank of Mauritius.

To inform policy dialogue and future engagement, the WBG launched its Country Climate and Development Report with the government and is undertaking a Growth and Jobs Study, helping shape reforms and investments to support climate resilience, employment, and economic transformation.

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Most of the WBG’s support to Mauritius has been provided through knowledge activities, including Technical Assistance funded via its Reimbursable Advisory Services.

Recent knowledge products have supported reforms in insolvency, secured transactions, and the broader business environment, helping improve creditor recovery and facilitate the restructuring of viable but distressed businesses. These reforms contribute to lower credit costs, expanding access to finance, and job preservation by enabling businesses to recover rather than exit the market. Complementing this work, a productivity study examined how Mauritian firms experience the business environment in practice. By linking firm-level perceptions to measurable outcomes such as productivity and employment, the report provided concrete insights into the constraints facing businesses and their implications for growth and job creation, factors that are directly tied to the economic well-being of the population of Mauritius.

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