In its analysis of the 2026-2027 Budget, BDO estimates that the government is seeking to reconcile the consolidation of public finances, economic growth and social protection in a context marked by geopolitical uncertainties, climate risks and the aging of the population.
The cabinet underlines that the Budget maintains several measures in favor of households, in particular the purchasing power shield, food and energy security, access to water, the maintenance of the VAT rate as well as additional aid for vulnerable groups.
According to BDO, the budgetary strategy is based on the modernization of the economy through artificial intelligence, digitalization, support for SMEs and start-ups, the development of the blue economy as well as the attraction of investments.
The cabinet notes, however, that the public finance situation remains a major challenge. The budget deficit is estimated at 6% of GDP for the 2025-2026 financial year, while public debt reaches 87.8% of GDP. The Budget targets a deficit of 3.7% of GDP in 2026-2027 and a gradual reduction in public debt to less than 80% of GDP by June 2029.
BDO also notes that the Mauritian economy displays several favorable indicators, with growth of 3.2% in 2025, inflation reduced to 3.7%, an unemployment rate of 5.7%, foreign exchange reserves of 10.3 billion dollars as well as tourism receipts of Rs 103.4 billion.
Finally, the cabinet considers that pension reform constitutes the most important structural measure of the Budget. He recalls that pension-related expenditure represents almost a quarter of public expenditure and emphasizes that the new system introduces an income-based State Age Pension, accompanied by a revised contributory system.
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