Mauritius Deficit Hits Rs 76.1 Billion as Public Debt Surges to Rs 570.5 Billion

Mauritius's public finances deteriorated sharply in the 2024/25 financial year, according to the latest Public Finance Statistics report (July 2024 – June 2025, Issue No. 1956) published by Statistics Mauritius on Tuesday, 29 July 2025. **The deficit is widening fast** The government's overall fiscal deficit — the gap between what the state collects and what it spends — reached Rs 76.1 billion for the financial year ending June 2025. That is a significant jump from Rs 56.2 billion recorded in the previous year. Expressed as a share of the economy, the deficit now stands at 10.6% of GDP, up from 8.5% a year earlier. This measure, known as the net borrowing requirement, is one of the most closely watched indicators of fiscal health. **Debt crosses a critical threshold** The General Government Gross Debt — the total amount owed by the Mauritian state — surged 16% in twelve months, rising from Rs 491.9 billion at the end of 2023/24 to Rs 570.5 billion as of 30 June 2025. Critically, the debt-to-GDP ratio climbed from 74% to 79.6%. Economists and international institutions such as the IMF typically flag ratios above 60% as requiring close monitoring, making this a significant warning sign for a small island economy like Mauritius. **How is the government funding the gap?** To bridge the shortfall, the government issued Rs 62.6 billion worth of debt securities on the domestic market — meaning it borrowed heavily from local banks and institutional investors. It also contracted an additional Rs 10.1 billion in external loans from foreign lenders. **Tax revenues are up — but spending is rising faster** The report notes that tax revenues did increase, driven largely by consumer spending. However, public expenditure grew at a faster pace, widening the deficit rather than narrowing it. The primary deficit — which strips out interest payments on existing debt to give a cleaner picture of current spending versus revenue — also deteriorated, though the full figure was not disclosed in the published excerpt. **What this means for Mauritians** For ordinary Mauritians, a rising debt-to-GDP ratio and a widening deficit carry real consequences. A government that borrows more must eventually spend more on interest payments, leaving less for public services such as health, education, and infrastructure. Rising domestic borrowing can also push up interest rates, making mortgages and business loans more expensive. For investors and credit rating agencies watching Mauritius, a debt ratio approaching 80% of GDP — combined with a deficit exceeding 10% — raises questions about fiscal sustainability and the government's ability to manage its finances without structural reform. The data comes at a time when many Mauritians are already feeling the squeeze of a higher cost of living, despite nominal wage gains across parts of the economy. Source: ION News