1. Latest information available on various sectors of the economy shows that GDP grew by 3.2% in 2013, same as estimated in December 2013. Exclusive of sugar, the growth rate worked out to 3.3%.
2. However, changes were noted at industry levels as follows:
(i) Other Agriculture: a lower growth rate of 1.7% instead of 5.5%, as a result of lower than expected performance of “Fishing activities” and “Food crops growing”.
(ii) Manufacturing: expanded at a higher rate of 4.5% compared to 3.0% mainly being better performance observed in “Building of ships and boats activities”.
(i) Accommodation and food service activities: grew by 2.5% rather than 3.5% as estimated earlier, based on a tourist arrivals of 993,106 instead of 1 million forecasted in December 2013.
3. On the basis of information gathered on key sectors of the economy, past trends and assuming the same implementation rate as in 2013 for measures announced in the last budget regarding public investment projects, GDP is forecasted to grow by around 3.7% in 2014, as forecasted in December 2013. Exclusive of sugar, the growth rate would be 3.8% compared to 3.3% in 2013.
The main assumptions used for the forecast of 3.7% growth in 2014 are:
(i) Agriculture, forestry and fishing: to expand by 7.1% higher than the 0.4% growth in 2013. Within the sector,
a. Sugarcane: sugar production of around 410,000 tonnes of refined and special sugars, resulting in a growth of 1.2% compared to -1.9% in 2013; and
b. Other Agriculture: to expand by 10.0% mainly due to expected increase in “Fishing activities”, compared to 1.7% in 2013.
(ii) Manufacturing: to expand by 2.4%, lower than the 4.5% growth in 2013. Within the sector,
a. “Sugar milling” to grow by around 3.2% after a contraction of -1.0% in 2013;
b. “Food processing” to expand by 3.0% taking into account the coming into full operation of the additional fish processing plant which was set up in the second semester of 2013, compared to the negative growth of -0.3% in 2013;
c. “Textile manufacturing” to grow at a rate of 2.0%, assuming sustained recovery in our main markets and diversification of regional markets, compared to 2.6% growth observed in 2013; and
d. “Other manufacturing” to expand at a lower rate of 2.0%, after the double digit growth of 13.0% in 2013.
Activities of Export Oriented Enterprises (EOE) are expected to rebound by 1.5% compared to the decline of -2.3% in 2013.
(iii) Construction: to decline further by -3.0% after the contraction of -9.4% in 2013, assuming the same implementation rate as in 2013 for public projects announced in the last budget and a drop in major private construction projects.
(iv) Accommodation and food service activities: a growth of around 3.0% based on a forecast of around 1,025,000 tourist arrivals in 2014 compared to 993,106 in 2013. Tourist earnings are forecasted at around R 44.0 billion compared to R 40.6 billion in 2013.
(v) Financial and insurance activities: to grow by 5.3% in 2014, nearly at the same rate as in 2013.
Consumption and Saving
4. Final consumption expenditure of households and government is expected to grow by 2.6%, higher than the 2.3% in 2013. Saving rate defined as the ratio of Gross National Saving to GDP at market prices, would increase to 13.0% from 12.8% in 2013.
5. Total investment would recover by 1.2% in 2014 following the decline of -3.5% in 2013. Exclusive of aircraft and marine vessels, investment would stagnate after contracting by -6.9% in 2013.
(i) Private sector investment is expected to decline further by -2.5% in 2014 after a drop of -3.1% in 2013. Exclusive of aircraft and marine vessels, private investment would grow by 0.3% after the fall of -7.4% in 2013.
(ii) Public sector investment is anticipated to rebound by 12.8% in 2014 after a dip of -4.9% in 2013. The growth would be mainly due to investment in Berth extension at Mauritius Container Terminal, additional investment in Bagatelle Dam and acquisition of a patrol vessel. Excluding aircraft and marine vessels, the growth rate would decline by -0.9% compared to -5.1% in 2013.
(iii) Investment rate defined as the ratio of investment to GDP at market prices would decrease to 20.9% from 21.2% in 2013. Exclusive of aircraft and marine vessels, the rate would fall to 19.9% compared to 20.5% in 2013.
(iv) Private sector investment rate would reach 15.4% and public sector 5.5% compared to 16.2% and 5.0% respectively in 2013. Exclusive of aircraft and marine vessels, investment rate of private and public sector in 2014, would be 15.1% and 4.8% respectively.
(v) The share of the private sector in total investment would decrease to 73.6% from 76.4% in 2013 and that of the public sector would increase to 26.4% from 23.6% in 2013. Exclusive of aircraft and marine vessels, the share of private sector investment would reach 75.8% and that of the public sector, 24.2%.