Mauritius Business Forecast Report Q4 2012

Executive Summary
Core Views
Major Forecast Changes
Key Risk To Outlook

Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
Domestic Politics
Choppy Waters Ahead For Ruling Party
Our view that 2012 would prove a challenging year for the incumbent Alliance de lAvenir coalition continues to play out The
governments slimmed down parliamentary majority and a reinvigorated opposition are certain to see an escalation in political
squabbling – though for now we do not regard this as sufficient to destabilise the ruling party We believe the main risks to stability are
likely to emerge from the economic front as external headwinds squeeze Mauritian households and businesses

Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
External Headwinds Prompt 2012 Growth Downgrade
We have made slight downward revisions to our GDP growth outlook for Mauritius in 2012 and 2013 – we forecast growth of 3 4% and
4 2% respectively – as the impact of the deepening economic malaise in the eurozone take its toll on the island s externally-driven
economy That said, over the medium term we remain positive, with growth expected to stabilise near the 4 5% level as the global
economy picks up speed
TABLE: ECONOMIC ACTIVITY
Balance Of Payments
C/A Deficit To Peak In 2012
We expect the Mauritian current account deficit to widen to a record low of 13 9 % of GDP in 2012 as weak demand in key export
markets and a hefty import bill weigh on the countrys external position While we expect this deficit to endure, albeit gradually narrow,
over the medium term, we believe the robust outlook for investment in the country, its attractive business environment and growing
economic ties with emerging markets should provide support to the islands overall balance of payments position
TABLE: CURRENT ACCOUNT
Fiscal Policy
Stable Fiscal Shortfall To Persist
We forecast the Mauritian budget deficit to widen to 4 8% of GDP in 2012 as constrained economic growth exerts downward pressure
on revenues That said, we believe the governments focus on investment and containing public expenditure bodes well for a
sustainable fiscal trajectory over the coming years
TABLE: FISCAL POLICY

Chapter 3: BMI Global Assumptions
Global Outlook
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES REAL GDP GROWTH FORECAST
TABLE: REAL GDP GROWTH CONSENSUS FORECASTS
TABLE: EMERGING MARKETS REAL GDP GROWTH FORECAST 21