After a promising first half driven by tourism revenues, Mauritius enters the final quarter of 2026 with a downward-revised growth trajectory. Economists now forecast 2.8% to 3% for the full year — down from 3.2% in 2025.
A weak first quarter: the early warning signal
The first quarter of 2026 delivered only 2% growth, compared with 3.4% in the same period last year. This early slowdown was attributed to weak domestic demand and rising logistics and energy costs. Six months on, the situation has only partially improved. The Mauritian economy remains resilient, but it enters Q4 without the momentum of an acceleration.
Tourism: the last engine running
Against this mixed backdrop, the tourism sector remains the economy's pillar. In the first seven months of the year, 804,633 visitors arrived on the island — up 2.1% year-on-year. More telling: tourism revenues in the first half surged 18%, reaching Rs 55.9 billion. The target of 1.47 million arrivals for 2026 remains on track, driven by European and Asian markets.
Sticky inflation, private investment in retreat
But the upbeat tourism figures run headlong into worrying domestic indicators. Inflation reached 4.9% in August 2026, squeezing household purchasing power and dampening domestic consumption. Private investment is also expected to contract in real terms — by around 1.2% — as businesses remain cautious amid geopolitical tensions and rupee depreciation.
Small and medium enterprises are particularly exposed to tighter credit conditions and delays in major infrastructure projects. The private sector is waiting for clear signals on the fiscal trajectory before committing further.
Why it matters
Mauritius's slowdown mirrors a regional pattern: other Indian Ocean island economies face the same tension between post-Covid recovery and macroeconomic headwinds. For Port Louis, the challenge is twofold — diversify beyond tourism and rebuild private investor confidence against a backdrop of tightening public finances. Decisions in the coming months on monetary policy and infrastructure investment will be pivotal for the 2027 outlook.
Source: Defimedia.info — October 2026