Mauritius is expected to record a 3% growth in 2026, following 3.5% in 2025, according to Statistics Mauritius. The National Accounts Estimates, published on September 30, show that the nominal GDP will reach Rs 873 billion, a 7.8% increase from 2025. However, this growth rate raises questions about the country's ability to transform its economy and change its development tier.
A 3% growth rate may seem reassuring, but it may not be sufficient for Mauritius to achieve its ambitions. The investment rate, as a percentage of GDP, is expected to decline from 21% in 2025 to 20.2% in 2026. Private investment is also expected to decrease by 0.8%, while public investment will decline by 2.3%. According to Mukesh Dawoonath, director of Statistics Mauritius, the decline in public investment is due to the timing of project implementation.
The consumption rate is also expected to slow down, with a 2.2% increase in 2026, compared to 2.5% in 2025. Household consumption will grow by 2.2%, down from 2.6% the previous year. While this is not a decline in consumption, it is a slowdown in growth. This could be a sign of pressure on purchasing power, especially with rising energy and import prices.
However, there are some encouraging signs. The domestic savings rate is expected to increase to 15.9% of GDP in 2026, up from 15.6% in 2025. The national savings rate will also rise from 16.3% to 17.4%. The challenge now is to transform this savings capacity into productive investments.
Economists believe that Mauritius needs to achieve a growth rate of 4% to 5% to finance its economic transformation and meet new employment needs. A 3% growth rate may be sufficient for a mature economy, but it may not be enough for a country trying to change its economic model. The International Monetary Fund (IMF) emphasizes the need for Mauritius to increase productivity, support private investment, and improve skills.
The IMF notes that labor productivity in Mauritius has grown at an average rate of 2.4% per year since 2010, compared to 4.2% for upper-middle-income economies. To achieve its goals, Mauritius needs to focus on increasing productivity and moving towards higher-value-added activities. Certain sectors, such as ICT and finance, are expected to grow rapidly, but traditional sectors like textiles are expected to decline.
The transition to a new economic model is challenging, as new sectors need to grow quickly and replace traditional ones. Mauritius needs to develop its capital, specialized skills, digital infrastructure, and research and development capabilities to support the growth of new sectors like artificial intelligence and biotechnology.
Key points
- Mauritius' 3% growth rate may not be enough to transform its economic structure.
- The country needs to achieve a growth rate of 4% to 5% to finance its economic transformation.
- Mauritius must focus on increasing productivity and moving towards higher-value-added activities.
