The African Development Bank (AfDB) released its Mauritius Country Focus Report 2026 on August 13, painting a nuanced picture of the Mauritian economy: solid fundamentals, a historic tourism record, but slowing growth and persistent structural challenges that are hampering economic upgrading.
Growth Slowing Down Before Rebounding
The Mauritian economy is expected to grow at 3% in 2026, down from 4.2% the previous year. This slowdown is primarily attributed to the impact of the Middle East conflict on commodity prices and softer global demand. The AfDB nevertheless forecasts a rebound to 3.8% in 2027, driven by financial services, wholesale and retail trade, and household consumption.
Tourism Breaks All Records
The tourism sector recorded 1.44 million arrivals in 2025, the highest level ever recorded in the island's history. This figure demonstrates Mauritius's ability to establish itself as a premium destination in the Indian Ocean region and beyond. The ripple effects of this influx will be felt in the 2026 season, with sustained bookings from Europe and Asia.
Inflation Overshooting Its Target
Inflation is expected to reach 5.7% in 2026, above the Bank of Mauritius's 2–5% target range. It should ease to 3.9% in 2027 as global commodity prices stabilize. This inflationary pressure weighs on household purchasing power and complicates short-term monetary management.
Public Finances: A Deficit to Consolidate
The fiscal deficit is projected at 6% of GDP in 2026, narrowing to 3.7% in 2027. Public debt, currently elevated, is expected to fall below 80% of GDP by 2029, provided fiscal consolidation efforts continue. The AfDB notes that current debt levels continue to constrain the government's fiscal space.
Structural Obstacles to Overcome
The report identifies several impediments to economic transformation: labor market rigidities, skills mismatches, an aging population, deficits in water, energy and port infrastructure, and gaps in the ICT sector. These constraints limit productive upgrading and the emergence of new high-value-added sectors.
Why It Matters
The AfDB recommends Mauritius mobilise development financing at scale — combining domestic revenue mobilisation, improved public expenditure efficiency, and engagement of African institutional investors and diaspora capital — to achieve its high-income economy vision. The sectors identified as drivers of the next growth phase: ocean economy, digital and knowledge economy, circular economy, and creative and cultural industries.
Source: African Development Bank Group, Mauritius Country Focus Report 2026 (published August 13, 2026). Data verified via Platform Africa and African Newspage.