The African Development Bank (AfDB) has published its annual country report on Mauritius. The conclusion is unequivocal: the path to high-income status is achievable — but only if the island mobilises development financing far beyond what current budget resources can provide alone.
A Slowdown in Growth
The report projects GDP growth of 3% in 2026, a deceleration compared to recent years, before recovering to 3.8% in 2027. Inflation is expected to peak at 5.7% this year, easing to 3.9% in 2027. The budget deficit remains a concern at 6% of GDP in 2026, with a target of returning to 3.7% next year. Public debt is projected to fall below 80% of GDP by 2029 — an achievable horizon, provided structural reforms are delivered.
Four Structural Bottlenecks
The AfDB identifies four key obstacles to Mauritius's economic transformation:
- Labour market rigidities and skills mismatches against the demands of the digital economy;
- Population ageing, which weighs on productivity and public finances;
- Infrastructure deficits in water, energy and port logistics;
- Technology gaps slowing the adoption of Industry 4.0.
On the tourism front, 2025 was a record year with 1.44 million arrivals. The key challenge now is diversifying the economy away from over-reliance on a single sector.
The AfDB's Prescription
To reach high-income status, the bank recommends action on six fronts: scaling up development financing, improving domestic revenue collection, increasing the efficiency of public spending, engaging African institutional investors and the Mauritian diaspora, accelerating digitalisation, and developing emerging economic pillars — the ocean economy, the circular economy, and the creative economy.
"Mauritius must mobilise development financing at scale to achieve its high-income ambition."
— AfDB, Mauritius Country Focus Report 2026, August 2026
Why It Matters
This report lands in a context of real fiscal pressure, following the Finance Bill 2026 which introduced new taxes and a 35% top marginal rate. The AfDB is essentially providing the roadmap that the Mauritian government must follow to avoid missing its window for high-income status. For investors, the signals are clear: the potential is real, but the credibility of reforms will be decisive. Key items to watch: labour market reform progress and advances in port and energy infrastructure over the next budget cycle.
Source: African Development Bank, Mauritius Country Focus Report 2026, 13 August 2026.