EXPORTS OF GOODS AND SERVICES

Due to COVID-19, the exports in Mauritius have been affected by the barriers
imposed on trade. Export bans have not yet been imposed, but there is a real fear
that food supply-chains may be disrupted.

The fall in export is considered as a downturn in the primary income of the

economy. So, Mauritius has to struggle to find buyers for its local products, mainly
clothing and fish as well as sea foods preparation. However, Tulsidas (2020)
asserted that despites the export shock, there is still secure future for the export of
sugar as our sugar is needed everywhere in places like Europe.

Finally as there is limited export, there is less or no inflow of foreign currency

within the economic system. This point will be discussed in details afterward.
IMPORTS OF GOODS AND SERVICES

During the period of the pandemic, the level of imports has decreased even if the
import of significant foreign commodities such as medicines is rightly needed. But
Mauritius is now less dependent on other countries like China. This situation
benefits local producers as well as manufacturers. They can maximize their profits
as they are solely providing for essential goods such as vegetables to the
population. Nevertheless, these local products are costly as local producers set high
prices. It is due to the rapid raise in aggregate demand than the productivity
capacity leading to demand pull inflation. According to IMF (2020) the
inflationary level is estimated at 4.7% this year and a forecast of 7% in 2021.
GROSS DOMESTIC PRODUCT (GDP)

COVID-19 is a “black Swan” event. [ CITATION Ben20 \l 1033 ] On account of it,

Mauritius is confronted with the “worst economic fallout since the great
depression”. (Georgieva, 2020) The Gross Domestic Product (GDP) of Mauritius
has decrease due to a fall in the value of national income compared to national
spending. [ CITATION Tej19 \l 1033 ] The GDP growth rate is experiencing a negative
spillover. Adding that Mauritius has an average growth rate of 3.5 % over the last
past 5 years, which is a rate already considered as low, but nevertheless, the
percentage has dropped further. According to International Monetary Fund (IMF)
forecast, the GDP growth is estimated to be at -6.8% in 2020 and shall ascend the
slope with a rate of 5.9% in 2021, subject to a partial economic recovery. (IMF,
2020)

The level of GDP growth is illustrated in the table below.

Indicator 2019 2020 2021

GDP( Annual % 3.5 -6.8 5.9

change)

Table 1: Forecast of GDP growth

Source: International Monetary Fund (2020)

During the previous years, Mauritius has succeeded to lower its debts-to-GDP
ratio, increasing its ability to cover the country’s sovereign debts. (IMF, 2020)
However, in the period of 2019, it has increased to 68.7% compared to 66.2% in
2018 and it is not expected to decrease in 2020. (IMF, 2020) In the actual
economic situation, the debts-to-GDP will tend to increase further which can lead
to debt crisis. Due to the high level of unemployment in the Mauritian economy,
the pressure is put on the government to borrow more money which will be
provided to Small and Medium Enterprises (SME’s) as subsidiaries. All this is like
a vicious cycle. It will be difficult to seek economic prosperity even if the forecast
GDP growth shows an increase in 2021 as the level of national output gain is much
lower than the level of national debts. The low level of economic output could
trigger a recession.