Mauritius Economy Slows as Inflation Hits 45% Since 2019

Two years after taking power, the Mauritian government is facing tough questions about its economic performance, with an independent assessment by economist Sanjay Goolab painting a mixed picture of progress and persistent strain.

Real GDP growth, one of the headline measures of an economy's health, slowed from 5 percent in 2024 to 3.2 percent in 2025. While the economy is still expanding, the deceleration signals that the post-pandemic rebound momentum is fading and that structural challenges remain unresolved.

Perhaps the most pressing concern for ordinary Mauritians is the cost of living. Cumulative inflation has reached close to 45 percent since 2019, meaning goods and services that cost Rs 100 six years ago now cost nearly Rs 145 on average. Wages, for many households, have not kept pace with that rise, squeezing purchasing power across the island.

The Mauritian rupee has also continued to depreciate against major currencies, making imports more expensive. Mauritius relies heavily on imported goods, from fuel to food to industrial equipment, so a weaker rupee feeds directly into higher prices for businesses and consumers alike.

Goolab's assessment suggests the government has three years remaining in its mandate to turn the economic narrative around and demonstrate that its policies can deliver tangible improvements. The phrase "three years to convince" reflects the political reality that economic credibility is built on results, not promises.

The government inherited a difficult legacy. The Covid-19 pandemic devastated Mauritius's tourism sector, which typically accounts for around 20 percent of GDP, and the subsequent global inflation wave compounded local difficulties. Supporters of the current administration argue that stabilising growth in that environment is itself an achievement.

Critics, however, point to the rupee's continued slide and the unresolved cost-of-living crisis as evidence that deeper structural reforms, particularly around energy dependency, trade diversification and wage policy, have not yet been tackled with sufficient urgency.

Mauritius's economy is classified as an upper-middle-income economy by the World Bank and has historically been regarded as one of Africa's most stable and diversified, with pillars in tourism, financial services, manufacturing and increasingly technology. Sustaining that reputation requires consistent growth and macroeconomic discipline.

What this means: For everyday Mauritians, the slowdown in GDP growth and the 45 percent cumulative inflation since 2019 translate into real financial pressure. Imported goods remain costly, the rupee buys less abroad, and the government faces growing expectations to show concrete economic improvements before the next election cycle. Investors and the diaspora watching Mauritius from abroad will be paying close attention to whether the next budget and policy announcements chart a credible path toward stronger, more inclusive growth.

Source: Le Defi Media