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Newsletter August 2017 - Improving our productive capacity

Dear Valued Investors,

After almost a decade of erratic progress in the wake of the 2007/08 economic debacle, the global economy seems to be reconnecting with a mode of relatively sustainable growth. Bloomberg for instance, through a consensus-based study, infers that global gross domestic product is expected to grow by 3.4 % in 2017 and 3.5 % in 2018.

Although this is no extraordinary performance, it indicates a definite acceleration compared with the performances of the previous years, with growth in the second quarter of 2017 increasing to 4.0 % from 3.1 % for the corresponding quarter of 2016.

This is even more comforting given the prevailing price stability and other positive trends at macroeconomic level. This should dispel fears that usually precede downturns.

The main reason behind this pick-up in activity is the rising growth in major economies in the euro zone and in Japan after a long period of clamped recovery. On the other hand, global trade flows have increased significantly.

Owing to its open economy, Mauritius should benefit from the dynamism of its major markets. Indeed, the first signs of economic recovery herald better prospects for our economy. Statistics Mauritius is pointing to a growth of 3.9% for 2017, with investments expected to increase by 5.3%. Inflation has been under control during the last year, an indication of the momentum in the business environment as well as within the consumer base. Tourist arrivals also increased by 6.3% for the first semester of the year.

However, the assumption of GDP growth as a measure of economic performance per se is a fallacious indicator if the improvement in figures is not translated into a betterment of the quality of life. 

For that to happen, the creation of quality jobs in more productive sectors of activity is essential. New pillars of the economy are being laid to support a new economic paradigm. Innovative projects are mushrooming, with promoters leveraging the competitive edge of Mauritius to start their operations.

The issuance of two additional Regulatory Sandbox Licenses was approved by the Board of Directors of BOI. These are referred to in this edition. Furthermore, new opportunities in the marine biotechnology sector are presented.

This edition of our newsletter describes recent changes in terms of the business climate. Finally, we bring to you an overview of the latest developments undertaken by key private stakeholders who are firmly committed to tapping the country’s potential.

I wish you a pleasant read.

Ken Poonoosamy
Managing Director