SUPPLEMENT TO THE BUDGET2018-2019 PURSUING OUR TRANSFORMATIVE JOURNEY BUDGET SUPPLEMENT | 2018-2019 1 BUDGET SUPPLEMENT | 2018-2019 3 SUPPLEMENT TO THE BUDGET 2018/2019 4 BUDGET SUPPLEMENT | 2018-2019 BUDGET SUPPLEMENT | 2018-2019 55 Purpose To supplement the Budget 2018-2019 with a review and outlook of the economy in greater detail. Outline The supplement is structured into four parts: 1. The Global Economic Performance with respect to output, investment flows and global trade 2. Review of the Mauritian Economy: Highlights 3. Economic Review and Outlook: Macroeconomy 4. Economic Review and Outlook: Sectoral Data coverage All data, unless otherwise specified, are official data from Statistics Mauritius and Bank of Mauritius. 6 BUDGET SUPPLEMENT | 2018-2019 Contents BUDGET SUPPLEMENT | 2018-2019 75 06 REVIEW OF THE GLOBAL ECONOMY 24 ECONOMIC SECTORAL REVIEW AND OUTLOOK: GLOBAL GDP GROWTH 06 SECTORAL PERFORMANCE GLOBAL TRADE 07 TRADITIONAL SECTORS 24 GLOBAL FOREIGN DIRECT INVESTMENT 07 AGRICULTURE, FORESTRY AND FISHING MAURITIUS AND THE GLOBAL ECONOMY 07 THE SUGAR-CANE SUB-SECTOR 25 MAURITIUS ECONOMIC GROWTH AND EMPLOYMENT 26 NON-SUGAR AGRICULTURAL SECTOR 27 WORLD TRADE 07 TEA PRODUCTION 27 FOOD CROPS 28 09 REVIEW OF THE MAURITIAN ECONOMY: HIGHLIGHTS FISH PRODUCTION LIVESTOCK 28 28 MILK AND CHEESE 29 MACROECONOMIC PERFORMANCE 10 EMPLOYMENT 29 MANUFACTURING 30 SECTORAL PERFORMANCE 13 SUGAR MANUFACTURING 31 FOOD PROCESSING 32 14 ECONOMIC REVIEW AND OUTLOOK: MACROECONOMY TEXTILE OTHER MANUFACTURING 33 33 TOURISM 34 MACROECONOMIC PERFORMANCE TOURIST ARRIVALS 34 TOURISM EARNINGS 35 MAURITIUS GDP GROWTH 14 EMPLOYMENT 36 EMPLOYMENT/UNEMPLOYMENT 14 TOURIST ACCOMMODATION 36 YOUTH UNEMPLOYMENT MODE OF TRANSPORT 37 PRODUCTIVITY 15 GOLF COURSES 37 CONSUMPTION EXPENDITURE 15 CONSTRUCTION 38 NATIONAL SAVINGS 16 FINANCIAL SERVICES 40 INVESTMENT 16 GLOBAL BUSINESS 41 FOREIGN DIRECT INVESTMENT INFLOWS 16 INVESTMENT 42 FOREIGN DIRECT INVESTMENT OUTFLOWS 17 ICT 43 EXTERNAL TRADE & BALANCE OF PAYMENT 17 EMERGING SECTORS 45 FOREIGN CURRENCY RESERVES 18 REAL ESTATE 45 INFLATION 18 IRS/RES/HIS/PDS 46 EXCHANGE RATE 18 KNOWLEDGE CENTRE OF EXCELLENCE 47 EXCESS LIQUIDITY 19 MEDICAL HUB 48 GOVERNMENT REVENUE 19 RENEWABLE ENERGY 49 GOVERNMENT EXPENDITURE 20 CREATIVE INDUSTRY 50 EXPENDITURE BY SECTOR 21 BLUE ECONOMY 52 FISCAL BALANCES 21 SEAFOOD 53 PUBLIC SECTOR DEBT 22 SEAPORT 53 STRUCTURE OF GOVERNMENT DEBT PORTFOLIO 22 CURRENCY COMPOSITION OF EXTERNAL DEBT 22 DEBT AFFORDABILITY 23 MATURITY STRUCTURE 23 INTEREST RATE RISK 23 EXTERNAL DEBT SERVICE RATIO 23 86 BUDGET SUPPLEMENT | 2018-2019 Review of the Global Economy Global GDP Growth According to the World Economic Outlook published CHART 1 : REAL GDP GROWTH 6.0 in April 2018 by the IMF, the global economic upswing that began around mid-2016 has become 5.0 4.8 4.9 4.3 4.4 broader and stronger. With financial conditions still 4.0 3.8 3.9 supportive and expectations of a sizeable fiscal 3.5 3.2 3.4 3.4 % 3.0 expansion in the United States, global growth is 2.3 2.4 2.8 expected to strengthen in 2018 and 2019. 2.0 2.1 1.8 1.4 The downside risks are possible sharp tightening 1.0 of financial conditions, waning popular support for 0.0 global economic integration, geopolitical strains, WORLD EURO AREA EMERGING MARKET AND DEVELOPING SUB-SAHARAN AFRICA growing trade tensions and risks of a shift toward ECONOMIES 2015 2016 2017 2018 protectionist policies. Source: World Economic Outlook, April 2018, IMF Global GDP growth is estimated to have picked up from 3.2 percent in 2016 to 3.8 percent in 2017, the to 4.8 percent in 2017. It is expected to rise further to 4.9 fastest rate since 2011. It is expected to rise to 3.9 percent in 2018. percent in both 2018 and 2019. China’s economic growth is forecast to moderate to In advanced economies, growth in 2017 is estimated 6.6 percent in 2018 from 6.9 percent in 2017. to have rebounded to 2.3 percent from 1.7 percent India’s GDP is expected to pick up to a 7.4 percent in 2016, explained almost entirely by a significant growth rate in its fiscal year 2018/19. surge in investment. In 2018, these economies are expected to grow at a higher rate of 2.5 percent. For the Sub-Saharan African region, growth is Faster growth in the US and Euro area, particularly in expected to rise to 3.4 percent in 2018 from 2.8 France, will drive this output acceleration. percent in 2017. Growth in Emerging Market and Developing Countries In South Africa, economic growth is forecast to tick is estimated to have increased from 4.4 percent in 2016 up to 1.5 percent in 2018 from 1.3 percent in 2017. BUDGET SUPPLEMENT | 2018-2019 97 CHART 4 : FDI FLOWS Global Trade 1,200 1,141 1,133 1,000 Global trade has picked up significantly in 2017, 800 859 744 712 685 USD BILLION 652 693 649 growing by 4.9 percent in contrast to 2.3 percent in 600 597 670 671 2016. It is expected to expand at a higher rate of 5.1 400 percent in 2018. 200 65 84 57 36 64 47 0 2012 2013 2014 2015 2016 2017 Developed countries Developing countries Transition Economies CHART 2 : WORLD TRADE VOLUME GROWTH RATE Source: World Investment Report 2018, UNCTAD 6 4 Mauritius and The Global Economy % 2 Chart 5 shows that during the past four decades, economic growth in Mauritius has followed a similar 0 pattern to that of global economic growth. However, 2015 2016 2017 2018 on average, the economic growth rate of Mauritius Source: World Economic Outlook April 2018, IMF has been higher than that of the global economy. The chart also shows that Mauritius has Global Foreign Direct Investment not known an economic recession in the past 37 years. Mauritius holds the record In contrast with accelerated growth in GDP and for the longest run of positive economic trade, global FDI flows declined by 23 percent in growth in the world. 2017 according to the World Investment Report 2018 of UNCTAD. CHART 5: GDP GROWTH UNCTAD forecasts a marginal increase in global 15 FDI flows of about 5 percent in 2018. 10 5 % 0 CHART 3 : WORLD FDI FLOWS -5 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2,000 -10 1,800 -15 USD BILLION 1,600 Mauritius World 1,400 Source: Statistics Mauritius & IMF WEO Database 1,200 1,000 Mauritius Economic Growth 2012 2013 2014 2015 2016 2017 and World Trade Source: World Investment Report 2018, UNCTAD Chart 6 shows that both GDP growth and the Export of Goods & Services of Mauritius are particularly FDI flows to developed economies fell by 37 sensitive to trends in Global Trade. percent in 2017 while flows to developing economies remained stable. CHART 6: MAURITIUS GDP GROWTH AND WORLD TRADE GROWTH Flows to transition economies also dropped by 27 30 percent after increasing by 78 percent in 2016. 20 % 10 For 2018, UNCTAD forecasts an increase in flows 0 1980 1985 1990 1995 2000 2005 2010 2015 -10 to developed and transition economies while flows -20 to developing countries will remain stable. World Trade Volume (IMF) Mauritius GDP Growth Rate Mauritius Exports of Goods & Services Source: Statistics Mauritius & IMF WEO Database 10 BUDGET SUPPLEMENT | 2018-2019 Seychelles Agalega Rodrigues INDIAN OCEAN Islands Comores Cargados Madagascar Carajos Islands Mauritius Reunion Rodrigues INDIAN OCEAN INDIAN OCEAN Source: ontheworldmap.com BUDGET SUPPLEMENT | 2018-2019 119 Review of the Mauritian Economy: Highlights Most indicators point to a firming up of macro- economic fundamentals and an economic re- newal leading to a higher growth path. Both the IMF and Moody’s have expressed opti- mism on the Mauritian economy. The IMF views that the macroeconomic outlook is broadly positive: “Economic activity is expected to remain robust, driven by the government’s ambitious Public Investment Program, and supported by continued dynamism in the tourism sector and financial intermediation activities. [...] Considering Mauritius’ track record of reinventing its economic model, there are grounds for optimism that the country will successfully manage the reform process.” Source: 2017 IMF Article IV Consultation Staff Report In March 2018, Moody’s re-affirmed the Baa1 rating for Mauritius – a rating which according to them is supported by strong growth and macroeconomic resiliency to shocks. “The Mauritian government’s credit profile is supported by a diversified, upper-middle income economy that has demonstrated resilience to external shocks, despite being small and open.” Source: Moody’s Investors Service Credit Opinion March 2018 10 12 BUDGET SUPPLEMENT | 2018-2019 Macro-Economic Performance PRODUCTIVITY REAL GDP GROWTH GROWTH LABOUR PRODUCTIVITY • 2017: 2.4% • 2017: 3.8% (Estimates) • 2016: 3.4% • FY 2017/18: 3.9% (Estimates) CAPITAL PRODUCTIVITY • 2018 : 3.9% (Forecast) • 2017: 0.9% • FY 2018/19: 4-4.2% (Forecast) • 2016: 1.1% MULTI FACTOR PRODUCTIVITY CONSUMPTION • 2017: 1.4% • 2016: 1.9% & SAVINGS TOTAL CONSUMPTION UNEMPLOYMENT EXPENDITURE RATE GROWTH IN 2017 LOWEST IN 16 YEARS • Real terms: 2.7% • Nominal terms: 6.1% • 2017: 7.1% • 2016: 7.3% AS A % OF GDP • 2017: 89.3% FEMALE • 2016: 89.0% UNEMPLOYMENT • 2017: 10.7% • 2016: 11.2% HOUSEHOLD CONSUMPTION YOUTH EXPENDITURE UNEMPLOYMENT GROWTH IN 2017 • 2017: 24.9% • Real terms: 3.0% • 2016: 23.9% AS A % OF GDP • 2017: 74.2% • 2016: 73.6% FOREIGN CURRENCY RATIO OF GROSS RESERVES DOMESTIC SAVINGS HIGHEST IN MORE TO GDP THAN FIVE DECADES • 2017: 10.7% • 2016: 11.0% • 2017: Rs 220.0 BILLION Enough to cover 10.7months’ imports • 2016: Rs 178.9 BILLION BUDGET SUPPLEMENT | 2018-2019 13 11 INVESTMENT PUBLIC FINANCE RS AS A % OF GDP TOTAL INVESTMENT BUDGET DEFICIT AS A % OF GDP • FY 2016/17: 3.5% • 2017: 17.3% • FY 2015/16: 3.5% • 2016: 17.2% PRIVATE RECURRENT BUDGET DEFICIT INVESTMENT • FY 2016/17: 1.9% AS A % OF GDP • FY 2015/16: 1.5% • 2017: 13.2% • 2016: 12.8% TOTAL REVENUE • FY 2016/17: 21.0% PUBLIC • FY 2015/16: 20.9% INVESTMENT TOTAL EXPENDITURE AS A % OF GDP • FY 2016/17: 24.5% • 2017: 4.1% • FY 2015/16: 24.4% • 2016: 4.4% FOREIGN DIRECT PUBLIC SECTOR DEBT INVESTMENT • END-JUNE 2017: 64.8% • 2017: Rs 17.5 BILLION • END-JUNE 2016: 65.0% • 2016: Rs 13.6 BILLION INFLATION EXTERNAL BALANCE HEADLINE BALANCE OF PAYMENT INFLATION RATE SURPLUS • 2017: 3.7% AS A % OF GDP • 2016: 1.0% • 2017: 6.2% • 2016: 6.0% YEAR-ON-YEAR INFLATION RATE CURRENT ACCOUNT DEFICIT • 2017: 4.2% AS A % OF GDP • 2016: 2.3% • 2017: 6.6% CORE 1 INFLATION TOTAL EXPORTS/IMPORTS • 2017: 2.2% OF GOODS AND SERVICES • 2016: 0.4% • Total exports of goods and services contracted by 0.6%, while total im- CORE 2 INFLATION ports of goods and services increased by 8.2%. • 2017: 2.2% • 2016: 2.2% 12 14 BUDGET SUPPLEMENT | 2018-2019 BUDGET SUPPLEMENT | 2018-2019 15 13 Sectoral Performance % Contribution to Growth in 2017 % Growth in 2017 1 0.8 0.6 0.4 0.2 0 0 2 4 6 8 10 0.7 FINANCIAL AND INSURANCE ACTIVITIES 5.5 0.3 CONSTRUCTION 7.5 0.4 TOURISM 5.2 0.4 WHOLESALE & RETAIL TRADE 3.1 0.3 ICT 4.4 0.2 MANUFACTURING 1.4 0.2 HUMAN HEALTH & SOCIAL WORK ACTIVITIES 4.5 0.2 5.4 PROFESSIONAL, SCIENTIFIC & TECHNICAL ACTIVITIES 0.2 REAL ESTATE ACTIVITIES 3.3 0.1 EDUCATION 1.8 1 0.8 0.6 0.4 0.2 0 0 2 4 6 8 10 % Contribution to Growth in 2017 % Growth in 2017 14 16 BUDGET SUPPLEMENT | 2018-2019 Economic Review & Outlook: Macroeconomy Mauritius GDP Growth Youth Unemployment In 2017, GDP expanded by 3.8 percent, with A high proportion of the unemployed were positive growth in all sectors, except sugarcane among the youths within the 16-24 years age and textile. group. It is expected that GDP growth would be 3.9 The youth unemployment rate is estimated at percent in 2018, mainly driven by financial 24.9 percent in 2017 compared to 23.9 percent services, construction and tourism. Sectors such as in 2016. agriculture, food processing, textile, construction, CHART 9 : YOUTH UNEMPLOYMENT RATE retail trade, ICT and global business are expected 35 32.7 to register a higher growth rate than in 2017. 31.2 31.9 30 MALE In nominal terms, GDP at market prices increased 26.3 23.9 24.9 by 5.8 percent in 2017 compared to 6.1 percent % 25 21.6 in 2016. It is expected to pick up to 7.0 percent in 18.3 19.5 FEMALE 20 2018. BOTH 15 SEXES CHART 7 : MAURITIUS’ GDP GROWTH 10 4.0 2015 2016 2017 3.9 3.9 3.8 3.8 The employment of Mauritians increased from 3.8 % 538,600 in 2016 to 545,100 in 2017. Increase in 3.7 female employment accounted for 58 percent of 3.6 the net increase in total Mauritian employment. 3.6 3.5 There were 28,400 foreign workers in Mauritius 2015 2016 2017 2018F in 2017. CHART 10 : MAURITIAN EMPLOYMENT Employment/Unemployment 2017 The unemployment rate declined to 7.3 percent in 2016 and further to 7.1 percent in 2017. 2016 CHART 8 : UNEMPLOYMENT RATE 13.5 2015 11.6 11.2 11.5 10.7 0 100 200 300 400 500 600 THOUSAND % 9.5 7.9 FEMALE 7.3 MALE BOTH SEXES 7.5 7.1 5.5 5.5 4.8 4.8 Total activity rate was 59.6 percent in 2017, 3.5 2015 2016 2017 same as in 2016. Male activity rate remained Male Female Both sexes unchanged at 74.3 percent while female activity rate increased from 45.5 percent to 45.7 percent. BUDGET SUPPLEMENT | 2018-2019 17 15 CHART 11 : ACTIVITY RATE CHART 13 : PRODUCTIVITY AND COMPETITIVENESS INDICATORS (YEAR 2007 = 100) 80 74.8 74.3 74.3 130 70 120 60.4 59.6 59.6 INDEX 60 110 % 100 50 46.6 45.5 45.7 90 40 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LABOUR CAPITAL MULTI FACTOR 30 PRODUCTIVITY PRODUCTIVITY PRODUCTIVITY 2015 2016 2017 MALE FEMALE BOTH SEXES Consumption Expenditure Productivity Total consumption expenditure increased, in The gap between growth in labour productivity nominal terms, by 5.3 percent in 2016 and 6.1 and average compensation continued to widen, percent in 2017, compared to 4.8 percent in leading to a constant rise in unit labour costs. 2015, mainly due to higher growth in household consumption. In 2017, labour productivity increased by 2.4 percent, while average compensation went up by In real terms, total consumption expenditure 4.1 percent. As a result, unit labour cost rose by 1.7 increased by 2.7 percent in 2017 compared to percent. 2.9 percent in 2016. Sectors with the highest increase in labour In 2018, total consumption expenditure is productivity during the period 2009-2017 were expected to increase by a higher rate of 6.8 administrative and support service activities, ICT percent in nominal terms and by 3.1 percent in and financial services. real terms. CHART 12 : LABOUR PRODUCTIVITY CHART 14 : CONSUMPTION EXPENDITURE (NOMINAL GROWTH) 200 12 9.7 150 10 8 7.3 INDEX 6.7 6.8 100 % 6.1 6 5.3 5.3 4.8 4.7 4.4 4.2 50 4 3.2 2 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 UNIT LABOUR COST AVERAGE LABOUR 2015 2016 2017 2018F (MRU) COMPENSATION OF PRODUCTIVITY EMPLOYEES FINAL CONSUMPTION HOUSEHOLDS GENERAL GOVERNMENT EXPENDITURE Capital productivity is on a rising trend and increased by 0.9 percent in 2017. Multifactor productivity, which measures the rate of change in productive efficiency, increased by 1.4 percent in 2017 compared to 1.9 percent in 2016. 16 18 BUDGET SUPPLEMENT | 2018-2019 Macroeconomy (cont’d) National Savings For 2018, the investment rate is forecast at around 17.2 percent. A decline in the ratio of Gross Domestic Savings, as a percentage of GDP, private investment to GDP from 13.2 percent was 11 percent and 10.7 percent respectively in in 2017 to 12.6 percent in 2018 would be offset 2016 and 2017. In 2018, it is expected to rise to by a rise in public investment to GDP ratio from 10.9 percent. 4.1 percent to 4.6 percent. Investment in non- residential building would remain high while a CHART 15 : SAVINGS pick-up is expected in residential buildings and 11.2 other construction works. 11.0 11.0 CHART 17 : INVESTMENT 10.9 (NOMINAL GROWTH) 10.8 2015 2016 2017 2018F % 10.6 10.7 40 29.7 10.4 30 25.6 10.4 15.6 10.2 20 13.4 3.6 5.2 10.0 % 10 1.8 4.8 2015 2016 2017 2018F 0 -0.1 GROSS DOMESTIC SAVINGS (GDS) AS A % OF GDP AT MARKET PRICES -10 -8.0 -10.6 -20 Investment -16.7 RESIDENTIAL NON- RESIDENTIAL OTHER CONSTRUCTION BUILDING BUILDING WORK The investment rate, defined as the ratio of gross domestic capital formation to GDP, averaged Foreign Direct Investment Inflows 17.3 percent during the period 2015-2017. Mauritius continues to attract significant The ratio of private investment to GDP for the amount of foreign direct investment. period averaged 12.9 percent. CHART 16 : INVESTMENT RATE CHART 18: FOREIGN DIRECT INVESTMENT FLOWS IN MAURITIUS 20 17.4 17.2 17.3 17.2 (EXCLUDING GLOBAL BUSINESS) 19,000 17,491 15 12.6 12.8 13.2 12.6 10 13,648 % 14,000 Rs Million 4.7 4.4 4.1 4.6 5 9,677 0 9000 2015 2016 2017 2018F PUBLIC PRIVATE TOTAL 4000 2015 2016 2017 Total investment grew by 5.9 percent in nominal terms in 2017 compared to 5.4 percent in 2016. [Note: For the period 2015-2017, the figures do not include reinvested earnings and shareholders’ loans and therefore are not comparable with Investment in non-residential buildings, which fell previous years’ data.] by around 15 percent on average annually over 2013-2016, increased by 29.7 percent in 2017 In 2017, there were some Rs 17.5 billion of FDI mainly due to the renovation of a number of flows in Mauritius compared to Rs 13.6 billion hotels. in 2016. These investments were mainly in real BUDGET SUPPLEMENT | 2018-2019 19 17 estate development and financial services, External Trade & Balance of which together accounted for 87.9 percent Payment of total inflows. The share of FDI directed towards the construction sector amounted to In 2017, Mauritius registered a visible trade 6.0 percent compared with an average of 4.2 deficit of 21.6 percent of GDP. The high deficit percent during the previous 4 years. is explained by lower exports of textile and clothing products and lower re-exports of France was the main source of FDI inflows, telecommunication equipment, combined with accounting for 25.1 percent of total inflows in higher imports of petroleum products and road 2017. Significant inflows were also registered vehicles. from Luxembourg, South Africa, China and the UK. In 2018, the visible trade deficit is expected to slightly go down to 21.5 percent of GDP. CHART 19 : FDI INFLOWS BY SECTOR, 2017 CHART 21: VISIBLE TRADE BALANCE AS A % OF GDP 41.0 39.3 38.0 38.6 Financial and Insurance activities 37.7% 22.8 19.4 17.7 Real 17.1 Estate activities 50.3% Construction 6.0% 2015 2016 2017 2018F Accommodation and food service -18.2 activities 2.2% -18.6 -21.6 -21.5 EXPORT OF IMPORT OF VISIBLE TRADE Information & GOODS GOODS BALANCE Communication 0.4% Others 3.4% The current account of the balance of payments registered a deficit of 6.6 percent of GDP in Foreign Direct Investment Outflows 2017. CHART 22 : COMPONENTS OF CURRENT In 2017, FDI outflows increased to Rs 2.6 billion, ACCOUNT AS A % OF GDP from Rs 1.8 billion in 2016. Most of the investment was directed towards financial services, 2015 2016 2017 manufacturing, and real estate development. 10 Some 74 percent of the investment went to 0 developing countries, particularly in Africa (Kenya, Mozambique and Madagascar) and -10 South Asia. -20 -16 -17 -20 CHART 20 : DIRECT INVESTMENT ABROAD -30 INCOME AND GOODS SERVICES 3,000 CURRENT CURRENT ACCOUNT 2,410 2,553 TRANSFERS 2,500 1,842 2,000 The surplus in the overall balance of payments RS MILLION 1,500 has been rising in recent years and reached 1,000 6.2 percent of GDP in 2017. Net inflows of 500 investment and government loans in the capital and financial account were more 0 2015 2016 2017 than adequate to finance the current account 18 20 BUDGET SUPPLEMENT | 2018-2019 Macroeconomy (cont’d) Foreign Currency Reserves CHART 24: INFLATION RATE As at end May 2018, total reserves amounted to 5 Rs 222.0 billion, equivalent to some 10.7 months 4 of imports. This is an increase of 23.8 percent over the level of reserves in May 2017. 3 2 % CHART 23 : GROSS OFFICIAL INTERNATIONAL RESERVES 1 0 250,000 12.0 MARS 15 MARS 16 MARS 17 MAR 118 SEPT 15 SEPT 16 SEPT 17 DEC 15 DEC 16 DEC 17 JUN 15 JUN 16 JUN 17 200,000 10.0 RS MILLION MONTHS 8.0 150,000 HEADLINE CORE1 CORE2 YEAR-ON-YEAR 6.0 100,000 4.0 50,000 2.0 [Note: Headline inflation is measured by comparing the average level of prices, as measured by the CPI, during a twelve-month period with the 0.0 average level during the corresponding previous twelve-month period.] SEPT 15 SEPT 16 SEPT 17 NOV 15 NOV 16 MAR 15 MAR 16 MAR 18 NOV 17 MAR 17 MAY 15 MAY 16 MAY 17 JAN 15 JAN 16 JAN 18 JAN 17 JUL 15 JUL 16 JUL 17 GROSS OFFICIAL INTERNATIONAL RESERVES IMPORT COVER (RHS) Exchange Rate In 2017, the Mauritian rupee appreciated against Inflation the currencies of most of its main trading partners, except the South African rand. In nominal effective Headline inflation reached a low of 1.0 percent terms, as measured by the Mauritius Exchange in 2016. It rose to 3.7 percent in 2017 due to the Rate Index 1 (MERI1), the rupee appreciated by 2.1 increase in prices of petroleum products, prices percent between December 2016 and December of vegetables following unfavourable climatic 2017 and 1.7 percent between December 2015 conditions and excise taxes on tobacco and and December 2016, compared to a depreciation alcoholic products. It further rose to 5.0 percent for of 9.4 percent between December 2014 and the year ending April 2018 due to a jump in the December 2015. prices of vegetables. Year-on-year inflation rate in December 2017 was CHART 25: MERI 1 4.2 percent compared to 2.3 percent in December CHANGE IN MERI 1 (+VE MEANS DEPRECIATION) 2016. It was at 3.7 percent in April 2018. 9.4 CORE1 inflation, which excludes “Food, Beverages and Tobacco” components and mortgage interest 6.0 % on housing loan from the CPI basket, increased from 0.4 percent in 2016 to 2.2 percent in 2017. It stood at 2.5 percent in March 2018. 1.0 CORE2 inflation, which excludes food, beverages -4.0 -1.7 -2.1 and tobacco, mortgage interest, energy prices DEC 2014/DEC 2015 DEC 2015/DEC 2016 DEC 2016/DEC 2017 and administered prices, was rather stable at 2.2 percent over the period. BUDGET SUPPLEMENT | 2018-2019 21 19 Against individual currencies, the rupee evolved in Excess Liquidity line with international trends. Excess liquidity in the banking sector, measured Against the US dollar, the rupee appreciated by 6.1 as cash balances held by banks in excess of the percent between December 2016 and December 2017. It was rather stable between December statutory cash reserve requirements, reached 2015 and December 2016. Rs 26 billion in December 2017 and remained at an elevated level of around Rs 22 billion, on Against the Euro, the rupee depreciated by 5.4 average, during the first quarter of 2018. percent between December 2016 and December 2017, in contrast to an appreciation of 2.9 percent CHART 27: EXCESS LIQUIDITY between December 2015 and December 2016. Against the British pound, the rupee depreciated 30,000 by about 1 percent against the pound between 25,000 RS MILLION 20,000 December 2016 and December 2017. It 15,000 appreciated by around 17 percent between 10,000 December 2015 and December 2016. 0 30 MARS 17 19 MARS 15 31 MARS 16 29 MAR 118 29 SEPT 16 24 DEC 15 CHART 26: EXCHANGE RATE 18 SEPT 17 23 JUN 16 3 SEPT 15 22 DEC 16 25 JUN 15 22 JUN 17 21 DEC 17 RS/USD 38 Government Revenue 33 Government total revenue amounted to 21 28 percent of GDP in FY 2016/17, almost same as Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Jan-16 Jan-17 Apr-17 Oct-17 Oct-17 Jan-18 in FY 2015/16. Tax revenue as a percentage of GDP increased from 18.5 in FY 2015/16 to 18.8 in FY 2016/17. RS/EUR Non-tax revenue, which includes grants from 45 donor countries and transfers from Special 40 Funds, amounted to 2.2 percent of GDP, slightly 35 lower than in FY 2015/16. 30 CHART 28: TOTAL REVENUE AS A % OF GDP Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Jan-16 Jan-17 Apr-17 Oct-17 Oct-17 Jan-18 20.9 21.0 20.3 18.4 18.5 18.8 RS/GPB 50 2.0 2.4 2.2 2014 2015/16 2016/17 30 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Jan-16 Jan-17 Apr-17 Oct-17 Oct-17 Jan-18 TAX REVENUE NON-TAX REVENUE TOTAL REVENUE Source: Ministry of Finance and Economic Development 20 22 BUDGET SUPPLEMENT | 2018-2019 Macroeconomy (cont’d) VAT receipt is the largest component of tax Government Expenditure revenue, followed by personal and corporate income taxes and excise duties. As a percentage Total government expenditure as a percentage of of GDP, VAT receipts were stable at 6.8, revenue GDP reached 24.5 in FY 2016/17. from income tax increased from 4.5 to 4.9 in FY 2016/17, and excise duties increased from 3.8 to Capital expenditure as a percentage of GDP went 3.9 mainly due to the increase in excise rates on down from 2.5 percent of GDP to 2.3 percent in FY tobacco and alcoholic products. 2016/17. CHART 29: SHARE OF TAX REVENUE, CHART 30: TOTAL EXPENDITURE AS A % OF GDP % FY 2016/17 23.5 24.5 24.4 Personal Income Tax 10.3% 20.6 21.9 22.2 Customs Duties 1.4% VAT 35.9% 2.9 2.5 2.3 Other Taxes 17.7% 2014 2015/16 2016/17 Excise RECURRENT CAPITAL TOTAL Corporate Duty 20.5% EXPENDITURE EXPENDITURE EXPENDITURE Income Tax 14.1% Source: Ministry of Finance and Economic Development Source: Ministry of Finance and Economic Development The ratio of recurrent expenditure to GDP increased from 21.9 percent to 22.2 percent in FY 2016/17 due to higher staff costs and increase in External grants increased from 0.1 of GDP to 0.6 pensions and other social benefits. percent in FY 2016/17 mainly due to the grants provided by the Government of India for the implementation of the Metro Express project, the CHART 31: RECURRENT EXPENDITURE construction of the Supreme Court building, the AS A % OF GDP ENT Hospital, acquisition of tablets for primary school students and the construction of social 8.0 6.2 6.3 housing. 6.1 5.9 6.1 6.0 4.9 4.0 2.6 2.4 2.4 2.0 0.0 2014 2015/16 2016/17 COMPENSATION INTEREST SOCIAL BENEFITS OF EMPLOYEES Source: Ministry of Finance and Economic Development BUDGET SUPPLEMENT | 2018-2019 23 21 Expenditure by Sector The share of Government expenditure allocated 2015/16 to 55.0 percent in FY 2016/17. to social sectors increased from 54.1 percent in CHART 32: EXPENDITURE BY SECTOR, FY 2016/17 Social Protection 27.7% Education 14.3% Others 34.8% Social sectors 55.0% Health 10.1% Environmental Protection 1.2% Recreation, Culture Housing 2.2% and Religion 0.8% Economic Sectors 8.9% Source: Ministry of Finance and Economic Development Fiscal Balances For FY 2016/17, the budget deficit was 3.5 After taking into account transactions in percent of GDP while the recurrent budget financial assets, namely loans and equity, registered a deficit of 1.9 percent of GDP. Government borrowing requirements slightly increased from 3.4 percent of GDP in FY 2015/16 to 3.5 percent in FY 2016/17. CHART 33: FISCAL BALANCES AS A % OF GDP 3.4% 3.4% 3.5% 3.5% 3.5% 3.2% 1.9% 1.5% 0.4% 2014 2015/16 2016/17 OVERALL BUDGET DEFICIT RECURRENT BUDGET DEFICIT GOVERNMENT BORROWING REQUIREMENTS Source: Ministry of Finance and Economic Development 22 24 BUDGET SUPPLEMENT | 2018-2019 Macroeconomy (cont’d) Public Sector Debt CHART 35: COMPOSITION OF GOVERNMENT DEBT Public sector debt, which includes debt of central Government, local authorities/parastatal bodies 90% 23.7% 24.1% 23.1% 21.3% 20.0% 17.4% 17.2% 16.9% and public enterprises, amounted to 65.5 percent of GDP, as at end March 2017. This high 70% level of debt was partly due to the issuance of 50% Government securities for mopping up excess 76.3% 75.9% 76.9% 78.7% 80.0% 82.6% 82.8% 83.1% liquidity in the banking sector as from September 30% 2014. As at end March 2017, some Rs 16 billion of Government securities, equivalent to 3.6 percent 10% of GDP, were issued for the purpose. DEC JUN DEC JUN DEC JUN DEC MAR 14 15 15 16 16 17 17 18 Since April 2017, Government securities are DOMESTIC EXTERNAL no longer being issued for mopping up excess Source: Ministry of Finance and Economic Development liquidity. At end December 2017, the debt ratio fell to 63.4 Currency composition percent. It declined further to 62.9 percent at end March 2018. of external debt The currency composition of Government CHART 34 : PUBLIC SECTOR DEBT AS % OF GDP external debt is generally aligned to that of 68% 45% proceeds from export of goods and services. 65.5% 66% 63.4% 63.6% 64.2% 65.0% 64.9% 64.4% 64.8% 64.5% Thus as at March 2018, 42.4 percent of external 63.4% 64% 62.9% 62.9% 35% debt was denominated in Euro, 30.3 percent in 62% 59.5% 59.5% 59.9% 25% US dollar, and 10.8 percent in Chinese Yuan. 59.3% 59.3% 58.6% 60% 57.7% 57.8% 57.3% 56.9% 15% 58% 56.6% 56.6% CHART 36 :CURRENCY COMPOSITION 56% OF GOVERNMENT EXTERNAL DEBT 5% 54% 6.3% 6.1% 5.9% 5.5% 5.4% 5.3% 5.1% 5.6% 5.5% 6.7% 6.4% 6.3% MAR 30.3% 42.4% 10.8% 16.5% 52% -5% 18 JUN SEP DEC MAR JUN SEP DEC MAR JUN SEP DEC MAR 15 15 15 16 16 16 16 17 17 17 17 18 DEC 32.3% 40.7% 11.0% 16.1% 17 PUBLIC SECTOR BUDGETARY CENTRAL PUBLIC ENTERPRISES DEBT (RHS) DEBT GOVERNMENT TOTAL DEBT JUN 33.5% 39.1% 11.2% 16.2% Source: Ministry of Finance and Economic Development 17 Structure of Government JUN 16 41.8% 32.1% 11.3% 14.8% Debt Portfolio DEC 14 39.5% 34.7% 10.7% 15.1% Domestic v/s External 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Most of the Government debt stock is domestically USD EURO CHINESE YUAN OTHERS sourced. As at end March 2018, some 83 percent of Government debt was held by domestic investors. Source: Ministry of Finance and Economic Development Most of Government external debt are from bilateral (G2G) sources or multilateral institutions and are on concessionary terms. BUDGET SUPPLEMENT | 2018-2019 25 23 Debt affordability CHART 38: STRUCTURE OF GOVERNMENT DOMESTIC DEBT (%) The debt affordability metrics have improved significantly as: 100% - the ratio of interest payments to Government 80% revenue has declined from 20.1 percent in FY 60% 2007/08 to 11.6 percent in FY 2016/17; and 40% - the ratio of interest payments to GDP has come 20% down from 3.9 percent to 2.4 percent over the 0% same period. DEC JUN DEC JUN DEC JUN DEC JUN DEC JUN DEC JUN DEC JUN DEC MAR 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 SHORT TERM MEDIUM TERM LONG TERM CHART 37: DEBT AFFORDABILITY RATIOS 9% Source: Ministry of Finance and Economic Development 30% 9% 20% 4% Interest Rate Risk 4% Interest rate risk is very low as more than 95 10% percent of Government’s domestic debt has a -1% fixed interest rate. 0% -1% 2007/08 2008/09 2010 2011 2012 2013 2014 2015/16 2016/17 The average time for re-fixing total Government INTEREST PAYMENTS TO INTEREST PAYMENTS debt, which is also a measure of interest rate risk, GOVERNMENT REVENUE TO GDP (RHS) has steadily increased and reached 4 years in Source: Ministry of Finance and Economic Development March 2018. External debt service ratio Maturity structure The external debt service ratio (external debt service as a percentage of revenue from The maturity structure of Government debt exports of goods and non-factor services) has has improved as evidenced by the following been relatively low in recent years. From 3.7 indicators: percent during FY 2015/2016, it increased to 6.2 percent at end-June 2017 mainly due to the Between end-December 2010 and end-March early repayment of external loans of some Rs 4.2 2018: billion. For the period March 2017 to March 2018, the debt service ratio declined to 5.8 percent. (a) The share of short-term domestic debt declined from 26 percent to 11.4 percent, and the share of long-term domestic debt Chart CHART 39: 39: External EXTERNAL DebtSERVICE DEBT Service Ratio RATIO increased from 39 percent to 63 percent. 5.9% 6.2% (b) The average time to maturity of Government domestic debt has been gradually lengthened from 2.9 to 4.7 years 3.8% 3.8% thereby reducing debt refinancing risks. 3.7% (c) Almost all external debt is long-term, with an average time to maturity of 5.9 years. Dec 2014 Jun 2016 Jun 2017 Dec 2017 Mar 2018 24 26 BUDGET SUPPLEMENT | 2018-2019 Economic Review & Outlook: Sectoral Traditional Sectors AGRICULTURE, FORESTRY AND FISHING The contribution of the agricultural sector to the economy declined to 3.1 percent in 2017. CHART 40: AGRICULTURE, FORESTRY AND FISHING AS A % OF GDP 5 % 4 3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F In 2017, its output contracted by 0.2 percent due to lower cane and sugar production and lower growth in production of food crops. It is expected to grow by 1.1 percent in 2018. CHART 41: REAL GROWTH RATE - AGRICULTURE, FORESTRY AND FISHING +12.0 +10.2 +10.0 +8.0 +6.0 % +2.7 +3.5 +3.7 +3.7 +2.0 +4.0 +1.1 +0.3 +1.1 +0.5 +2.0 +0.0 -2.0 -0.4 -0.2 -4.0 -2.2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F AV GROWTH 07-17 In 2016, employment in the sector amounted to 41,300, accounting for 7.3 percent of total employment in the economy. CHART 42: TOTAL EMPLOYMENT - AGRICULTURE, FORESTRY AND FISHING 60.0 40.0 THOUSAND 20.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 SUGARCANE NON SUGAR BUDGET SUPPLEMENT | 2018-2019 27 25 THE SUGARCANE SUB-SECTOR The share of the sugarcane sub-sector in Agriculture has declined in recent years to reach 18.7 percent in 2017. Its share in GDP has consequently declined to 0.6 percent. CHART 43: CONTRIBUTION OF SUGARCANE SECTOR 2.00 60 40 % 1.00 % 20 0.00 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F SUGARCANE AS A % OF AGRICULTURE (RHS) SUGARCANE AS A % OF GDP Gross value added in the sub-sector declined by 7.9 percent in real terms in 2017 compared to a 5.2 percent growth in 2016. It is expected to register a zero growth in 2018. CHART 44: REAL GROWTH RATE - SUGARCANE SECTOR +20.0 +14.9 +15.0 +10.0 +4.3 +5.2 +5.0 +2.4 0.0 % +0.0 -5.0 -2.2 -3.5 -3.8 -1.4 -6.5 -5.4 -10.0 -7.9 -9.9 -15.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F AV GROWTH 07-17 In 2017, some 49,973 hectares, under sugarcane cultivation, were harvested, down by 2.9 percent compared to 2016. CHART 45: CANE AREA 75,000 70,000 HECTARES 65,000 60,000 55,000 50,000 45,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 AREA UNDER CANE CULTIVATION CANE AREA HARVESTED 26 28 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) THE SUGARCANE SUB-SECTOR (cont’d) Sugarcane production amounted to 3.7 million 2016. Total sugar produced was 355,213 tonnes tonnes in 2017, compared to 3.8 million tonnes in in 2017, down from 386,277 tonnes in 2016. CHART 46: CANE AND SUGAR PRODUCTION 4,900,000 500,000 450,000 4,400,000 TONNES TONNES 400,000 3,900,000 350,000 3,400,000 300,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CANE PRODUCTION SUGAR PRODUCTION (RHS) Average cane yield per hectare increased from two consecutive years of decline. 73.8 tonnes in 2016 to 74.3 tonnes in 2017, after CHART 47: CANE YIELD 100.0 77.3 74.4 74.6 72.9 71.4 79.8 76.5 74.3 73.1 73.8 80.0 65.9 TONNES / HECTARES 60.0 40.0 20.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EMPLOYMENT In 2016, the sugarcane industry accounted for 30.0 sector. Employment in the industry was at around percent of total employment in the agricultural 12,400 in 2016, of which 71.8 percent were men. CHART 48: EMPLOYMENT - SUGARCANE SECTOR 17.0 12.0 THOUSAND 7.0 2.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 MALE FEMALE BOTH SEXES BUDGET SUPPLEMENT | 2018-2019 29 27 NON-SUGAR AGRICULTURAL SECTOR The share of non-sugar agricultural activities in Agriculture increased to 81.3 percent. CHART 49: CONTRIBUTION OF NON-SUGARCANE SECTOR 3.0 100 2.0 % 50 % 1.0 0.0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F NON SUGARCANE AS A % OF NON-SUGARCANE AS A % OF GDP AGRICULTURE (RHS) The non-sugar sector grew by 2.3 percent in 2017 and a growth of 1.3 percent is expected in 2018. CHART 50: REAL GROWTH RATE - NON-SUGAR SECTOR +8.0 +6.9 +6.5 +6.0 +4.5 +3.9 +4.1 +3.5 % +4.0 +2.7 +3.2 +2.3 +1.5 +1.8 +1.6 +2.0 +1.3 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F AV GROWTH 07-17 TEA PRODUCTION Tea plantation covered an area of 622 hectares manufactured tea (Black Tea) increased by in both 2016 and 2017. 1.9 percent from 1,353 tonnes in 2016 to 1,379 tonnes in 2017. Some 7,300 tonnes of green tea leaves were produced in 2017. The production of CHART 51: TEA PRODUCTION 10,000 8,000 6,000 TONNES 4,000 2,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GREEN BLACK TEA 28 30 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) FOOD CROPS A total of 7,780 hectares, under food crops, were increased by 0.3 percent from 106,271 tonnes in harvested in 2017, representing an increase of 2016 to 106,621 tonnes in 2017. 0.2 percent. The production of food crops CHART 52: FOODCROPS 130,000 9,000 120,000 HECTARES TONNES 110,000 7,000 100,000 90,000 5,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 PRODUCTION AREA (RHS) FISH PRODUCTION Fish production increased by 36.1 percent, from for processing and exports), which accounts for 16,698 tonnes in 2016 to 22,732 tonnes in 2017. 92 percent of total fish production, rose by 40.8 Production of other catch (mainly tuna percent. Fresh coastal fish catch decreased by 2.6 percent. CHART 53: TOTAL FISH PRODUCTION 30,000 25,000 22,732 TONNES 20,000 16,698 14,239 15,000 12,637 5,000 6,377 6,706 5,887 5,660 5,283 4,780 5,795 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LIVESTOCK In 2017, production of beef from live cattle Production of goat meat and mutton went up by amounted to 2,078 tonnes, 6.2 percent higher 33.3 percent from 42 tonnes in 2016 to 56 tonnes than in 2016. Ninety six percent of the production in 2017. The production of pork decreased by came from the slaughter of imported cattle 4.1 percent. which increased by 4.7 percent in 2017. BUDGET SUPPLEMENT | 2018-2019 31 29 CHART 54: LIVESTOCK SLAUGHTERED 30,000 NO OF HEADS 27,000 24,000 21,000 18,000 15,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 POULTRY The production of poultry increased by 3.7 percent from 45,800 tonnes in 2016 to 47,500 tonnes in 2017. MILK AND CHEESE Some 4,025 tonnes of fresh milk and cream were and dried milk went up from 17,857 tonnes in produced in Mauritius in 2016. Imports of fresh 2015 to 22,414 tonnes in 2016. CHART 55: LOCAL PRODUCTION AND IMPORTS OF MILK 24,000 18,000 TONNES 12,000 5,025 5,025 4,525 4,025 6,000 0 2013 2014 2015 2016 LOCAL PRODUCTION IMPORTED MILK EMPLOYMENT OF MILK Total employment in the non-sugar sector was 28,900 in 2016, 36.3 percent of whom were women. CHART 56: EMPLOYMENT - NON SUGAR SECTOR 25.0 25.0 THOUSAND THOUSAND 5.0 15.0 2007 5.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 MALE FEMALE BOTH SEXES 30 32 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) MANUFACTURING ` The manufacturing sector includes Sugar Chart 57 shows that the share of the Processing, Food, Textiles and Other manufacturing sector, in terms of contribution to Manufacturing activities. GDP, has been decreasing. CHART 57: MANUFACTURING AS A % OF GDP 17 15 13 11 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F The manufacturing sector grew by 1.4 percent In 2018, the sector is expected to grow by 1.3 in 2017, compared to 0.3 percent in 2016. percent, with improvements in Textile and Food. CHART 58: REAL GROWTH RATE - MANUFACTURING +4.7 +5.0 +4.0 +2.6 +2.9 % +3.0 +2.4 +2.1 +1.8 +1.9 +1.9 +2.0 +1.4 +1.3 +0.7 +1.0 +0.1 +0.3 +0.0 AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH 07-17 In 2016, some 98,700 people were employed in the manufacturing sector. CHART 59: TOTAL EMPLOYMENT - MANUFACTURING 115.0 112.9 113.4 110.0 THOUSAND 105.0 104.5 103.1 101.6 101.6 101.0 100.0 99.5 98.8 98.7 95.0 90.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 BUDGET SUPPLEMENT | 2018-2019 33 31 The output per employee increased to Rs 546,160 in 2016. CHART 60: OUTPUT PER EMPLOYEE IN MANUFACTURING 600,000 550,000 500,000 450,000 RS 400,000 350,000 300,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 SUGAR MANUFACTURING In 2018, the industry is expecting a sugar production of around 355,000 tonnes which is the same as in 2017. CHART 61: TOTAL SUGAR PRODUCTION 490,000 440,000 TONNES 390,000 340,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 In 2017, the sugar manufacturing sector grew by 2.4 percent. It is expected to register a zero growth rate in 2018. CHART 62: REAL GROWTH RATE - SUGAR +18.0 +20.0 +15.0 +10.0 +5.6 +6.6 +4.1 % +5.0 +0.4 +0.8 +2.4 0.0 +0.7 +0.0 -5.0 -2.9 -5.8 -5.1 -10.0 -15.0 -12.8 AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH 07-17 32 34 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) In 2016, there were around 1,400 employees in the sugar milling sector. CHART 63: TOTAL EMPLOYMENT - SUGAR 2.0 1.8 1.5 1.5 1.6 1.6 1.5 1.5 1.5 1.5 1.4 1.5 THOUSAND 1.0 0.5 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FOOD PROCESSING Food processing activities are expected to grow by 1.0 percent in 2018, higher than the 0.2 percent growth in 2017. CHART 64: REAL GROWTH RATE - FOOD, EXCLUDING SUGAR +10.0 +7.6 +8.0 +6.1 +6.0 +4.2 +4.1 +3.0 +2.7 % +4.0 +2.7 +2.4 +1.4 +0.2 +1.0 +2.0 0.0 -0.3 -2.0 -1.4 AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH 07-17 Total employment in the sector increased to around 18,300 in 2016. CHART 65: TOTAL EMPLOYMENT - FOOD, EXCLUDING SUGAR 17.3 18.2 18.3 20.0 16.5 15.2 13.8 14.5 13.2 15.0 11.4 12.1 THOUSAND 10.0 5.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 BUDGET SUPPLEMENT | 2018-2019 35 33 TEXTILE Textile manufacturing is expected to expand by 1.0 percent in 2018, following a contraction of 0.7 percent in 2017. CHART 66: REAL GROWTH RATE - TEXTILE AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH 07-17 +15.0 +9.8 +10.0 +0.3 0.0 0.0 +3.0 +2.6 +4.2 +1.0 +0.8 % +5.0 0.0 -5.0 -1.1 -2.8 -0.7 -10.0 -5.8 Total employment in the sector was around 47,100 in 2016, compared to around 48,600 in 2015. CHART 67: TOTAL EMPLOYMENT - TEXTILE 80.0 60.0 64.2 63.6 54.9 THOUSAND 53.7 50.1 48.6 49.3 49.5 48.6 47.1 40.0 20.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 OTHER MANUFACTURING Other manufacturing sectors grew by 4.5 percent in 2017 and are expected to expand by 2.0 percent in 2018. CHART 68: REAL GROWTH RATE - OTHER MANUFACTURING AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH +12.7 07-17 15.0 10.0 +2.8 +1.8 +2.0 +4.8 +4.5 % 5.0 +2.0 +2.1 +0.6 0.0 0.0 -0.2 -5.0 -1.0 -4.3 -10.0 Total employment in the sector was estimated at around 31,900 in 2016. CHART 69: TOTAL EMPLOYMENT - OTHER MANUFACTURING 38.0 36.2 35.8 36.0 34.8 34.3 THOUSAND 33.8 33.3 33.5 33.3 32.7 34.0 31.9 32.0 30.0 28.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 34 36 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) TOURISM The tourism sector is the fourth most important In 2017, it grew by 5.2 percent and it is forecast contributor to the economy, accounting for 7.1 to grow by 4.7 percent in 2018. percent of GDP. CHART 70: REAL GROWTH RATE - TOURISM +12.7 +11.5 15.0 +7.0 +6.3 +7.2 10.0 +5.2 +4.7 +4.7 +1.7 +3.2 +1.9 5.0 +0.7 % 0.0 -5.0 4.9 -10.0 AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH 07-17 TOURIST ARRIVALS Some 1.3 million tourists visited Mauritius in Reunion and South Africa remained the main 2017, an increase of 5.2 percent from 2016. source countries in the African region, with Tourist arrivals are forecast to increase to 1.4 tourist arrivals from South Africa increasing by million in 2018. 7.0 percent over the past year. Europe is the leading market with a share Among Asian countries, arrivals from India of around 60 percent of total arrivals. The grew by 4.4 percent, while those from China number of tourists from France increased by dropped by 8.1 percent in 2017. 0.5 percent, from Germany by 14.5 percent, from UK by 5.6 percent and from Italy by 12.0 percent in 2017. CHART 71: TOTAL TOURIST ARRIVALS 1,410,000 1,341,860 1,275,227 1,151,252 1,038,334 992,503 934,827 964,642 956,441 930,456 871,356 906,971 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F BUDGET SUPPLEMENT | 2018-2019 37 35 TOURISM EARNINGS Tourism earnings increased to Rs 60.3 billion in 2017, from Rs 55.9 billion in 2016. It is estimated at Rs 62.5 billion for 2018. CHART 72: TOURISM EARNINGS 60,262 55,867 RS MILLION 50,191 41,213 42,717 44,378 44,304 40,687 39,456 40,557 35,693 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 [Note: As from 2015, tourism earnings figures include data from money changers and foreign exchange dealers.] Average expenditure per tourist increased to around Rs 44,900 in 2017 from around Rs 43,800 in 2016. CHART 73: AVERAGE EXPENDITURE PER TOURIST 47,000 45,967 46,000 44,860 44,938 45,000 44,293 44,283 43,835 43,587 44,000 42,642 43,000 42,208 RS 42,000 40,963 40,839 41,000 40,000 39,000 38,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 SURVEY OF INBOUND TOURISM 1st Semester 2017, Statistics Mauritius According to the Survey of Inbound Tourism Around 60 percent of tourists travelled on a carried out by Statistics Mauritius during the 1st package tour (where airfare, accommodation Semester of 2017, tourists from Russia were the and other items such as meals, sightseeing, car highest spenders followed by Switzerland, UK, hire are included in the tour price paid before China and the US. departure from the home country of the tourist) Tourists spent some 13.6 million nights in and spent some Rs 5,005 per tourist per night Mauritius in 2017. The average length of stay per compared to only Rs 3,595 by those travelling tourist works out to 10.3 nights. Visitors from UAE on non-package tour. spent the most per night in Mauritius, followed by Some 80 percent of total tourists stay in hotels, their Chinese, American and Swiss counterparts. 8.5 percent in tourist residences, 5.5 percent Some 60 percent of total expenditure was with friends/relatives, and 5.3 percent in guest on accommodation, 12 percent on food and houses. More than 90 percent of tourists from beverages, 9 percent on shopping, 7 percent on India and the UK, and 80-90 percent of tourists sightseeing and 4 percent on entertainment and from China, Germany, South Africa, Italy and recreation. Switzerland stay in hotels. 36 38 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) EMPLOYMENT Total employment in the Accommodation and As at March 2017, it was estimated that there food service sector, the major component of were 30,974 employees in large establishments tourism, was estimated at around 40,800 in 2016. in hotels, air transport services, tour operators, Output per employee was around Rs 705,000 that travel agencies and car rental, slightly higher year. than in 2016. CHART 74: EMPLOYMENT IN LARGE ESTABLISHMENTS, HOTELS AND TRAVEL & TOURISM ACTIVITIES 30,974 30,556 29,352 29,437 29,115 29,000 28,487 28,935 27,664 27,685 26,622 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TOURIST ACCOMMODATION As at end December 2017, 111 hotels were The bed occupancy rate also increased from 65 operational in Mauritius and one was under percent to 68 percent over the period. renovation. The total room capacity of these hotels was 13,511 with 29,650 bed places. For Large hotels accounted for 51 percent of all the year 2017, the room occupancy rate of all hotels, 78 percent of total room capacity and 80 hotels averaged 77 percent, up from 73 percent percent of total bed places. in 2016. CHART 75: OCCUPANCY RATE ROOM OCCUPANCY RATE BED OCCUPANCY RATE 68% 68% 70% 67% 65% 63% 77% 79% 60% 76% 57% 58% 70% 72% 73% 55% 57% 55% 62% 65% 63% 65% 65% 67% 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 ALL HOTELS LARGE HOTELS BUDGET SUPPLEMENT | 2018-2019 39 37 MODE OF TRANSPORT Ninety-eight percent of tourists travel by air increased significantly. In 2017, some 29,600 to Mauritius. During the past few years, the tourists arrived by sea. number of tourists arriving by cruise ships has CHART 76: CRUISE VESSELS AND TOURIST ARRIVALS BY SEA 40,000 40 29 30 30,000 23 23 23 30 18 20 20,000 15 10,000 10 25,047 16,930 12,815 3,336 19,797 28,365 29,565 0 0 2012 2012 2013 2014 2015 2016 2017 TOURIST ARRIVALS BY SEA CRUISE VESSELS (RHS) According to the Air Traffic Forecast Report 2017 largest foreign airline is Emirates, with 361,636 of Airports of Mauritius Ltd, the total seat capacity outbound seats followed by Air Austral with in 2017 was 2,353,455. Air Mauritius is the largest 10.4 percent of seat capacity. carrier with 46.6 percent of seat capacity. The CHART 77: SEAT CAPACITY IN MAURITIUS IN 2017 Others 17.6% South African Airways 4.7% Air France 5.2% Air Austral 10.4% Air Mauritius Emirates 46.6% 15.5% Source: Air Traffic Forecast Report 2017, Airports of Mauritius Ltd GOLF COURSES 18-HOLE CHAMPIONSHIP GOLF COURSES IN MAURITIUS There are currently nine 18-hole Championship MONT CHOISY GYMKHANA golf courses around the island, designed by ANAHITA ILE AUX CERFS world leading golfers. TAMARINA GOLF ESTATE CONSTANCE BELLE MARE VILLAS VALRICHES AVALON GOLF ESTATE PARADIS GOLF 38 40 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) CONSTRUCTION In 2017, the construction industry recovered from Growth in the construction sector is expected to a five-year contraction, with a growth rate of 7.5 rise further to 9.5 percent in 2018, driven mostly percent. This upturn resulted mostly from higher by investment in major public infrastructure private investment, especially in the tourism sector. projects. CHART 78: REAL GROWTH RATE - CONSTRUCTION +20.0 +15.7 +15.0 +11.8 +7.5 +9.5 +10.0 +5.9 +4.3 % +5.0 +1.4 0.0 0.0 -5.0 -2.0 -3.0 -4.9 -10.0 -8.2 -8.5 AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH 07-17 Total investment in the construction sector billion. It is expected to increase by 9.3 percent in increased by 12.6 percent in 2017 to reach Rs 1.3 2018 to Rs 1.4 billion CHART 79: INVESTMENT IN CONSTRUCTION 2,600 2,400 2,200 RS MILLION 2,000 1,800 1,600 1,400 1,200 1,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F BUDGET SUPPLEMENT | 2018-2019 41 39 Investment in building and construction work, 2016 to Rs 49,917 million in 2017. It is expected which accounts for 63.0 percent of total investment, to increase by 12.8 percent to Rs 56,303 million in increased by 7.6 percent from Rs 46,408 million in 2018. CHART 80: INVESTMENT IN BUILDING AND CONSTRUCTION WORK 14,199 12,287 13,067 11,677 16,078 RS MILLION 9,872 12,802 10,726 21.925 24,859 24,828 26,026 2015 2016 2017 2018F RESIDENTIAL BUILDING NON-RESIDENTIAL BUILDING OTHER CONSTRUCTION WORK EMPLOYMENT Total employment in the construction sector was estimated at 39,600 in 2016. CHART 81: TOTAL EMPLOYMENT - CONSTRUCTION 44.0 42.6 42.8 42.7 43.0 42.5 THOUSAND 42.0 41.4 40.7 41.0 40.0 40.1 40.2 39.6 40.0 39.0 38.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Output per employee increased by 1.6 percent to reach Rs 404,722 in 2016. CHART 82: OUTPUT PER EMPLOYEE IN THE CONSTRUCTION SECTOR 460,000 440,000 420,000 400,000 Rs 380,000 360,000 340,000 320,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 40 42 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) FINANCIAL SERVICES The Financial and Insurance activities sector contributes around 10.5 percent to GDP. CHART 83: FINANCIAL AND INSURANCE ACTIVITIES AS A % OF GDP 11.5 11.0 % 10.5 10.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F The sector expanded by 5.5 percent in 2017 and is expected to grow at the same rate in 2018. CHART 84: REAL GROWTH RATE - FINANCIAL AND INSURANCE ACTIVITIES +12.0 +10.1 +10.0 +7.6 +8.0 +5.7 +5.7 +5.5 +5.5 +5.3 +5.7 +5.5 +5.5 +6.0 % +6.0 +4.7 +4.5 +4.0 +2.0 +0.0 AV 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F GROWTH 07-17 The total investment in the sector amounted to Rs 2.3 billion in 2017. Some Rs 1.8 billion are expected to be invested in 2018. CHART 85: INVESTMENT IN FINANCIAL AND INSURANCE ACTIVITIES 3,000 2.500 RS MILLION 2.000 1,500 1,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f BUDGET SUPPLEMENT | 2018-2019 43 41 The Financial and Insurance activities sector representing 2.4 percent of total employment in employed around 13,500 workers in 2016, the economy. CHART 86: TOTAL EMPLOYMENT - FINANCIAL AND INSURANCE ACTIVITIES 12.6 13.1 13.5 13.5 13.5 15.0 11.3 11.9 12.2 10.6 9.3 THOUSANDS 10.0 5.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Output per employee works out to Rs 3.5 million in 2016. CHART 87: OUTPUT PER EMPLOYEE IN FINANCIAL AND INSURANCE ACTIVITIES 4,000,000 3,500,000 RS 3,000,000 2,500,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 GLOBAL BUSINESS The Global business sector contributed around Between January 2017 and 2018, the number 5.5 percent to GDP and grew by 4.5 percent in of live global business companies Category 2017. It is expected to expand at a higher rate 1 (GBC1) increased by 3.9 percent to 11,501. of 4.7 percent in 2018. During the same period, the number of GBC Category 2 declined from 10,283 to 10,084. CHART 88: NUMBER OF LIVE GBCS 12,500 11,500 10,500 9,500 JAN- 13 JAN- 14 JAN- 15 JAN- 16 JAN- 17 JAN -18 GBC (CATEGORY 1) GBC (CATEGORY 2) Source: Financial Services Commission TABLE 1 : GLOBAL BUSINESS EVOLUTION Number of Live GBCs1 Category12 Category2 MCs3 Global Funds4 Jan-13 9,660 11,207 165 860 Jan-14 9,825 10,668 171 871 Jan-15 10,306 11,011 174 883 Jan-16 10,756 10,688 180 917 Jan-17 11,067 10,283 178 929 Jan-18 11,501 10,084 182 982 1: Exclude companies Struck off / surrendered licence/ licence revoked/ Licence Lapsed or changed regime during the year 2: Include Global Funds 3: MCs Management Companies (Include Corporate Trustees as from May 2008) 4: Exclude funds in process of winding up Source: Financial Services Commission 42 44 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) EMPLOYMENT Some 3,355 persons were employed in figures for 2017 indicated a further increase of Management Companies in December 2016, 3,614 in employment. compared to 2,987 in December 2015. Provisional CHART 89: EMPLOYMENT IN MANAGEMENT COMPANIES 3614 3355 2988 2724 2451 2286 2012 2013 2014 2015 2016 2017 INVESTMENT In 2016, total outward investment through GBC1 of total investment into Africa increased from 8.7 entities amounted to USD 327.6 billion, out of percent in 2015 to 9.6 percent in 2016. which around 55 percent was to India. The share CHART 90: TOTAL GBC1 OUTWARD INVESTMENT 70 300 50 USD BILLION 200 30 % 100 10 0 -10 2012 2013 2014 2015 2016 TOTAL OF GBC 1 INVESTMENT SHARE OF INVESTMENT TO INDIA (RHS) SHARE OF INVESTMENT TO AFRICA (RHS) BUDGET SUPPLEMENT | 2018-2019 45 43 ICT The ICT sector contributes around 5 percent to GDP, on average. CHART 91: ICT AS A % OF GDP 6 5 4 3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F Activities in the ICT sector expanded by 4.4 percent in 2017 and are expected to grow by 4.5 percent in 2018. CHART 92: REAL GROWTH RATE - ICT +15.1 +16.0 +12.4 +14.0 +11.7 +11.2 +12.0 +9.4 +8.9 +9.0 +10.0 +6.9 +6.6 +7.1 % +8.0 +5.4 +4.4 +4.5 +6.0 +4.0 +2.0 00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F AV GROWTH 07-17 In 2016, large establishments in the ICT sector 4.9 percent of the total employment in large employed around 15,390 persons, representing establishments nationwide. TABLE 2: EMPLOYMENT IN LARGE ESTABLISHMENTS - ICT SECTOR 2012 2013 2014 2015 2016 Large Establishments in ICT sector 136 138 140 134 129 Employment in ICT sector 12,972 14,094 14,747 15,006 15,390 Male 7,068 7,600 7,900 8,120 8,060 Female 5,904 6,494 6,847 6,886 7,330 44 46 BUDGET SUPPLEMENT | 2018-2019 Traditional Sectors (cont’d) In 2017, exports of ICT goods amounted to Rs and re-exports of cellular phones. Exports of ICT 1,295 million, while imports were Rs 9,653 million. services amounted to Rs 4,385 million against Trade in ICT goods was lower than in 2015 and imports of Rs 3,523 million. 2016, mainly due to a decline in both imports CHART 93: TRADE IN ICT TRADE IN ICT SERVICES TRADE IN ICT GOODS 8,000 20,000 6,000 15,000 RS MILLION RS MILLION 4,000 10,000 2,000 5,000 0 0 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 IMPORT EXPORT While the percentage of households with 2016, to reach 63.3 percent of total households. cellular mobile telephones increased by 2.6 The number of mobile cellular subscriptions per percent between 2014 and 2016, the percentage 100 inhabitants went up from 139.5 in 2015 of those with fixed telephones declined by to 143.6 in 2016. This represented an increase 2.5 percent. The number of households with of 2.9 percent, with 1,814,000 mobile cellular internet access increased by 11.3 percent in subscriptions in 2016. CHART 94: ICT INFRASTRUCTURE AND ACCESS 200 PER 100 INHABITANTS 150 100 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FIXED TELEPHONE MOBILE CELLULAR INTERNET LINES SUBSCRIPTIONS SUBSCRIPTIONS The proportion of the population aged 5 and Mauritius has been consistently improving its above who can use computers reached 60.5 performance in the ICT sector. The International percent in 2016, indicating an increase of 1.7 Telecommunication Union ranked Mauritius, with percent compared to 2014. an ICT Development Index of 5.88, 1st in Africa and 72nd out of 176 countries worldwide in 2017. CHART 95: ICT DEVELOPMENT INDEX 5.88 5.27 5.51 5.22 2014 2015 2016 2017 Source: International Telecommunication Union BUDGET SUPPLEMENT | 2018-2019 47 45 Economic Review And Outlook: Sectoral Emerging Sectors REAL ESTATE In 2017, Real Estate activities grew by 3.3 percent and are expected to expand by 3.4 percent in 2018. CHART 96: REAL GROWTH RATE - REAL ESTATE ACTIVITIES +7.1 +8.0 +6.2 +6.9 +7.0 +5.6 +6.1 +5.3 +5.3 +6.0 +4.6 +4.8 +4.3 +4.1 +5.0 +3.3 +3.4 % +4.0 +3.0 +2.0 +1.0 00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F AV GROWTH 07-17 In 2017, around 38 percent of total investment and is expected to increase by 4.7 percent to was directed towards the Real Estate sector. reach Rs 31,297 million in 2018. Investment in the sector went up by 6.3 percent CHART 97: INVESTMENT IN REAL ESTATE ACTIVITIES 34,000 29,000 RS MILLION 24,000 19,000 14,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 46 48 BUDGET SUPPLEMENT | 2018-2019 Emerging Sectors (cont’d) CHART 98: GROSS DIRECT INVESTMENT FLOWS IN REAL ESTATE ACTIVITIES IN 2017 IRS/RES/IHS/PDS 1 In 2017, Rs 8.8 billion of FDI were invested in Real Estate development, of which 65.7 Others percent went to projects 34.3% under the IRS/RES/IHS/PDS IRS/RES/IHS/PDS 65.7% Schemes. It was estimated that 50 IRS, 100 RES and 67 PDS residential units were sold in 2017. CHART 99: RESIDENTIAL UNITS SOLD NUMBER OF IRS UNITS SOLD NUMBER OF RES UNITS SOLD NUMBER OF PDS UNITS SOLD 80 250 250 225 229 223 67 198 70 186 200 200 60 159 50 150 150 129 113 117 40 94 103 100 82 101 83 100 100 62 59 30 42 50 39 20 50 20 33 50 10 2 0 0 0 2015 2007 2009 2011 2013 2015 2017 2009 2010 2011 2012 2013 2014 2015 2016 2017 2016 2017 Source: Economic Development Board Between 2005 and 2017, total revenue from the sales of these residential units amounted to Rs 6,708 million namely Rs 2,709 million from IRS, Rs 3,023 million from RES, and Rs 976 million from PDS. CHART 100: REVENUE FROM SALES OF RESIDENTIAL UNITS IRS SALES REVENUE RES SALES REVENUE PDS SALES REVENUE 696 18, 20000 5000 1200 96 04 4,0 3,7 976.4 23 025 15000 4000 1000 3,0 RS MILLION RS MILLION RS MILLION 1,6 ,689 70 11, 3000 2,5 10000 800 56 71 2 27 1,5 1,7 2000 81 13 09 20 600 73 3,8 29 5000 3,0 2,7 2,9 2,7 1000 1,6 400 0 0 200 2005-2010 2011 2012 2013 2014 2015 2016 2017 2005- 2011 2012 2013 2014 2015 2016 2017 2010 55.2 0 2016 2017 Source: Economic Development Board 1. The Integrated Resort Scheme (IRS), the Real Estate Scheme (RES) and Property Development Scheme (PDS) are aimed at encouraging the acquisition of residential property in Mauritius by non-citizens. BUDGET SUPPLEMENT | 2018-2019 49 47 KNOWLEDGE CENTRE OF EXCELLENCE Total enrolment in tertiary education amounted The number of foreign students in Mauritius has to 48,089 in 2016. Around 80 percent (38,178) increased from 573 in 2007 to 1,736 in 2016. were studying locally and 20 percent (9,911) The students are mainly enrolled in medical overseas. Of those based locally, around programmes, business management, information 55 percent (20,966) were enrolled in public technology, hospitality management and Law. funded institutions, 32 percent (12,303) in It is estimated that an international student private institutions and 13 percent (4,909) were spends on average MUR 20,000 per month which undertaking self-study2 without going through a includes tuition fees, accommodation costs and tertiary institution locally. living expenses. CHART 101: ENROLMENT IN TERTIARY EDUCATION 9,460 8,958 10,151 11,099 9,911 10,063 10,907 10,939 11,248 17,994 9,531 13,464 18,603 17,664 16,250 17,212 11,661 10,663 9,612 10,003 19,882 21,766 22,442 21,562 23,627 22,793 21,621 17,372 20,966 15,880 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 PUBLIC FUNDED INSTITUTIONS PRIVATE & SELF-STUDY OVERSEAS CHART 102: ENROLMENT OF INTERNATIONAL STUDENTS IN TERTIARY EDUCATION LOCALLY 2000 1500 1000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 MALE FEMALE TOTAL The foreign students came from 69 different countries, mainly India, South Africa, Nigeria, Madagascar, France, Tanzania and Kenya. TABLE 3: MAIN COUNTRIES OF ORIGIN OF INTERNATIONAL STUDENTS Number Percentage India 503 29.0 South Africa 231 13.3 Nigeria 146 8.4 Madagascar 122 7.0 France 110 6.3 Tanzania 82 4.7 2. Students on Self-study follow courses exclusively through the distance education/e-learning mode Kenya 79 4.6 2. Students on Self-study follow courses exclusively through the distance education/e-learning mode 48 50 BUDGET SUPPLEMENT | 2018-2019 Emerging Sectors (cont’d) MEDICAL HUB CHART 103: MAIN AREAS OF MEDICAL TREATMENT IN 2017 In 2017, some 11,000 foreign patients visited Mauritius for treatment Other 23% compared to 18,000 in 2016. They chose Mauritius mainly for advanced treatment in cardiology, cosmetic General Medical Check ups 36% & plastic surgery, hair grafting and General surgery 9% fertility treatment. Cosmetic and plastic surgery 15% Cardiology 17% CHART 104: MAIN COUNTRIES OF ORIGIN OF MEDICAL TOURISTS IN 2017 14 15 10 Around 14 percent of foreign 10 patients were from France and 16 % 3 3 percent from countries in the region. 5 0 FRANCE MADAGASCAR SEYCHELLES COMOROS Source: Economic Development Board There are 5 regional hospitals and 2 district Seventeen private health institutions are also hospitals providing public healthcare services providing health care services. in Mauritius. In addition, there are 3 specialised hospitals for chest diseases, 1 for eye diseases, There are some 5,000 medical and paramedical 1 for ear, nose and throat (E.N.T.) diseases, 1 personnel in the public sector and 2,900 in the psychiatric hospital and 2 Cardiac Centres. private sector. CHART 105: PUBLIC & PRIVATE SECTOR HEALTH PERSONNEL IN 2016 PUBLIC SECTOR SELECTED HEALTH PRIVATE SECTOR SELECTED PERSONNEL IN 2016 HEALTH PERSONNEL IN 2016 Pharmacists 1% Doctors Pharmacists 17% (incl.314 Specialists) 23.0% Dentists 1% Doctors Qualified (incl.499 Nurses Specialists) & Midwife 56.0% 16% Qualified Nurses & Midwife Dentists 75% 11% BUDGET SUPPLEMENT | 2018-2019 51 49 RENEWABLE ENERGY In 2016, around 15 percent of the total primary renewable sources comprising hydro, wind, landfill energy requirement was produced from local gas, photovoltaic, bagasse and fuel wood. CHART 106: RENEWABLES AS A % OF TOTAL ENERGY REQUIREMENTS 20 15 10 5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Bagasse was the main source of energy supply from the renewables. CHART 107: SOURCES OF RENEWABLES AS A % OF TOTAL LOCAL (RENEWABLES) REQUIREMENTS IN 2016 Fuel Wood 2.8% Hydro 3.8% Wind 0.7% Bagasse Landfill Gas 90.9% 0.7% Photovoltaic 1.1% Energy production from photovoltaic went up by Production from wind increased significantly from 18.2 percent in 2016, from 2.2 ktoe3 to 2.6 ktoe. 0.2 ktoe to 1.5 ktoe that is around 7 folds. 3. Ktoe: thousand tonnes of oil equivalent 50 52 BUDGET SUPPLEMENT | 2018-2019 Emerging Sectors (cont’d) CREATIVE INDUSTRY Between 2016 and 2017, the contribution to GDP of the Arts, Entertainment and Recreation sector increased from 3.0 percent to 3.1 percent . CHART 108: ARTS, ENTERTAINMENT AND RECREATION AS A % OF GDP 3.50 3.00 2.50 2.00 1.50 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F The sector expanded by 4.7 percent in 2017 and is expected to grow by 4.8 percent in 2018. CHART 109: REAL GROWTH RATE - ARTS, ENTERTAINMENT AND RECREATION +14.0 +11.5 +12.0 +10.9 +10.0 +8.1 +7.7 +7.7 +7.2 +8.0 +6.7 +6.8 % +5.5 +4.8 +6.0 +4.7 +4.7 +4.8 +4.0 +2.0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F AV GROWTH 07-17 In 2017, some Rs 571 million were invested in substantially to Rs 1,785 million, mainly due to the Arts, Entertainment and Recreation sector. the construction of the Multi-Sport Complex at In 2018, investment is expected to increase Cote d’Or. CHART 110: INVESTMENT IN ARTS, ENTERTAINMENT AND RECREATION 2,000 1,800 1,600 RS MILLION 1,400 1,200 1,000 800 600 400 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F BUDGET SUPPLEMENT | 2018-2019 53 51 In 2016, employment in the sector increased from around 11,600 to around 12,200 persons. CHART 111: TOTAL EMPLOYMENT - ARTS, ENTERTAINMENT AND RECREATION 15 11.6 12.2 9.8 10.6 THOUSAND 7.6 7.6 8.9 10 6.4 5.4 4.6 5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Output per employee increased from Rs 1,066,293 in 2015 to Rs 1,078,700 in 2016. CHART 112: OUTPUT PER EMPLOYEE IN ARTS, ENTERTAINMENT AND RECREATION 1,180,000 1,130,000 1,080,000 RS 1,030,000 980,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 52 54 BUDGET SUPPLEMENT | 2018-2019 Emerging Sectors (cont’d) BLUE ECONOMY Mauritius has a total maritime zone of 2.6 expanse of 396,000 km2 is co-managed with million km2, of which 2.3 million km2 represents the Republic of Seychelles.4 the Exclusive Economic Zone. An additional EXCLUSIVE ECONOMIC ZONE OF JOINT MANAGEMENT AREA SUBMISSION IN THE REGION PRELIMINARY INFORMATION (MAURITIUS AND SEYCHELLES OF RODRIGUES ISLAND IN THE CHAGOS THE REPUBLIC OF MAURITIUS EXTENDED CONTINENTAL SHELF) ARCHIPELAGO REGION 4. The Republic of Mauritius established that the outer edge of the continental margin in the relevant land territory in the Chagos Archipelago Region (Egmont and Diego Garcia Islands) extends beyond 200 nautical miles. As required by the United Nations Convention on the Law of the Sea (UNCLOS Article 76), Mauritius made a submission to the Commission to set out the coordinates of the outer limits of the Extended Continental Shelf (ECS). BUDGET SUPPLEMENT | 2018-2019 55 53 THE SEAFOOD SECTOR CHART 113: REAL GROWTH RATE - SEAFOOD +15.0 +12.0 +11.3 +9.8 +10.0 +6.8 +6.4 +6.6 +5.2 +3.6 +4.0 % +5.0 +2.2 +1.6 -1.6 -2.8 0.0 - 5.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F AV GROWTH 07-17 In 2017, imports of seafood products increased at Rs 3,503 million, while processed seafood year-on-year from Rs 11,132 million to Rs products exported amounted to Rs 10,768 12,634 million. These imports were re-exported, million. A net export of Rs 1,637 million in the processed and canned for exports, and consumed seafood sector was recorded. locally. Total re-exports5 in 2017 were estimated CHART 114: TOTAL EXPORTS AND IMPORTS OF FISH AND FISH PREPARATIONS +20000 +15000 RS MILLION +10000 +3,590 +3,563 +5000 +1,767 +2,719 +2,945 +1,637 +201 0 2011 2012 2013 2014 2015 2016 2017 NET EXPORTS EXPORTS (F.O.B VALUE) IMPORTS (C.I.F VALUE) SEAPORT In 2017, out of the 3,184 vessels which visited Port cruise vessels has increased by about 1 percent Louis, 34 percent were fishing vessels while 17 in 2017. percent were carrying containers. The share of TABLE 4: VESSEL TRAFFIC 2011 2012 2013 2014 2015 2016 2017 Vessel Traffic 2,654 3,476 3,652 3,329 2,947 2,934 3,184 Containerised Vessels 543 624 669 607 568 567 538 Dry Bulk Carrriers 53 57 61 58 52 56 58 Tankers (Liquid Bulk Carriers) 74 71 70 61 78 141 115 General Bulk Vessels 13 11 5 7 103 101 100 Fishing Vessels 767 851 993 1,067 953 977 1,067 Cruise Vessels 23 23 15 18 23 28 30 Others 1,181 1,839 1,839 1,511 1,170 1,064 1,276 Source: Mauritius Port Authority 5. Re-exports are goods which are exported in the same condition as imported or after undergoing minor operations which leave them essentially unchanged 54 56 BUDGET SUPPLEMENT | 2018-2019 Emerging Sectors (cont’d) Total cargo traffic (both imports and exports) increased from 7.3 million tonnes in 2016 to 7.7 million tonnes in 2017. CHART 115: CARGO TRAFFIC 10.0 8.0 MILLION TONNES 1.3 1.1 1.1 1.2 1.1 1.3 6.0 1.1 4.0 5.4 5.9 5.7 5.7 5.7 6.0 6.4 2.0 0 2011 2012 2013 2014 2015 2016 2017 IMPORTS EXPORTS Source: Mauritius Port Authority In 2017, some 379,371 containers were handled in 2017 – 250,916 containers (TEU: 20 foot equivalent units) for imports and 128,455 for exports. CHART 116: CONTAINER TRAFFIC 440,000 420,000 400,000 380,000 TEU’S 360,000 340,000 320,000 300,000 2011 2012 2013 2014 2015 2016 2017 Source: Mauritius Port Authority 60 BUDGET SUPPLEMENT | 2018-2019 Printed by Government Printing Department La Tour Koenig Pointe aux Sables June 2018