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The Budget for the fiscal year 2021/22 of the Republic of Mauritius was presented by Dr The Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development on the 11 June 2021.
The budget measures long for Recovery, Revival and Resilience in the expectation of vaccination being the game changer, amidst prospects of strong recovery globally. The measures centered around an ongoing economic agenda resting on three main pillars being: a boost to investment, shaping a new economic architecture and restoring confidence. Key to this are massive investments in public infrastructure, strengthening social protection and opening up of the economy.
The 2021/22 Budget was presented in the wake of yet another year of unprecedented events, having faced with two lockdowns during the past couple of
Mauritius is no exception to other world economies facing the pandemic across various stages of outbreaks and varying levels of readiness. After a contraction of 14.9% in 2020 driven by declines in output, investment (-20%) and household consumption (-12%), headline inflation is reported to be at +2.5% due to sharp increases in commodity prices offset by lower interest rates and the incidence of lower price of cooking gas in our basket of goods.
Furthermore, unemployment has been contained to 9.2% owing to the noncyclical interventions, namely in the form of wage support schemes such as WAS and SEAS. With a reported economic contraction of 5.4% in 2020/21 and a positive growth of 9% forecasted for 2021/22, the Honourable Minister resisted the temptation to balance his Budget for the next fiscal year, accepting a deficit of 5% (FY21 –5.6%).
This alone goes towards restoring confidence, critical to boosting investment and consumer spending. He continues the vast infrastructural projects engaged in the last few years, announcing Rs65 billion expenditure over the next 3 years. He does not compromise on the Welfare State, keeping generous measures previously taken.