MCB Group., owner of Mauritius's biggest lender, trimmed its forecast for the country's 2022 economic growth to 6.2% from 6.7% in January, citing spillover effects from the Russia-Ukraine conflict.
“While we have very limited economic exposure to the two countries, the global fallout of the ongoing Russia-Ukraine conflict is inevitably going to have notable indirect effects onto the domestic economy,” J. Gilbert Gnany, MCB's chief strategy officer, said in an e-mailed report.
“There are already visible signs that the sharp rise in input costs resulting from the jump in commodity and energy prices and disrupted supply chains would, coupled with the downward revisions in our main trading partners, weigh on the strength of the recovery being witnessed locally,” he said.
Growth in the tourism dependent-economy rebounded to 4% in 2021 from a 14.9% contraction in the prior year due to the Covid-19 pandemic. Statistics Mauritius' forecast was for a 4.8% expansion led by reopening of borders to vaccinated visitors.
The Indian Ocean island-nation with a population of 1.3 million is a net importer of food, fuels and equipment. Year-on-year inflation accelerated for a sixth straight month to 10.7% in March, according to Statistics Mauritius.
“Considering that imported items bear a significant weight in the Consumer Price Index basket, such global disturbances are poised to feed into higher pressures on prices,” Gnany said.
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