Mauritius Public Expenditure Review - From Resilience to Performance - Modernizing Fiscal Policies to Boost Mauritius’s Growth Post-pandemic

Jul 19, 2026

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Mauritius Public Expenditure Review examines how modernizing fiscal policies and upgrading public finance management can strengthen macroeconomic stability and accelerate growth in the post-pandemic period. The report analyzes the fiscal policy framework, including revenue mobilization, tax expenditure streamlining, and improving allocative and technical efficiency of public spending. It also addresses fiscal risks through monitoring contingent liabilities and evaluates budget system constraints, execution volatility, and the need to restore credible fiscal discipline via formal processes and rules.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages129

Reading Time5 h 25 min

Executive Summary

Modernizing Fiscal Policies and Upgrading Public Finance Management to Strengthen Macroeconomic Stability and Boost Economic Growth

Introduction

Overview and Macroeconomic Context

Fiscal Policy Framework

Public Finance Management Framework

Key Messages and Policy Options

References

Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized MAURITIUS PUBLIC EXPENDITURE REVIEW From Resilience to Performance: Modernizing Fiscal Policies to Boost Mauritius’s Growth Post-pandemic November 2023 THE WORLD BANK MACROECONOMICS, TRADE AND INVESTMENT GLOBAL PRACTICE AFRICA EAST REGION Acknowledgements This report was prepared by a team led by: Gabriela Schmidt (Economist, ELCMU, and TTL) and Kirk David Schmidt (Governance Specialist, EAEG2, and co-TTL) . The team included Francisco Haimovich Paz (Senior Economist, HAEE1) Sjamsu Rahardja (Resident Representative, EAEM2) Ruxandra Burdescu (Lead Governance Specialist, EAEG2) Mario Negre (Senior Economist, EAEPV) Alexander Haider (Research Analyst, EMFMD) Emmanuel JoseVazquez (Consultant, HAEE1) Iwona Maria Borowik (Consultant, SSAS2) Sudhir Shetty (Consultant, EAWM2) Daisy Yesenia Loayza (Consultant, ELCMU) Sergio Alfredo Garcia Gomez (Consultant, EAEM2) Kirstin Iman Conti (Consultant, IDD02) James Brumby (Consultant, EGVPF) Jose Carlos Illan Sailer (Consultant, EAEPV) NaniA. Makonnen (Senior Program Assistant, EAEM2) Suran Kc Shrestha (Program Assistant, EAEG2) Sean Craig Lothrop (Consultant, CGRDR) provided excellent editorial support. The report was prepared under the overall guidance of: Idah Pswarayi-Riddihough (Country Director, AECS2) Mathew A. Verghis (Regional Director, ESADR) Marco Antonio Hernandez Ore (Practice Manager, EAEM2) Omowunmi Ladipo (Practice Manager, EAEG2) Paulo Guilherme Correa (Program Leader and Lead Economist, EACS2) Zubair Kurshid Bhatti (Lead Public Sector Specialist, EAEG2) Emre Ozaltin (Program Leader, HLCDR) provided valuable and timely feedback throughout the preparation of the report. Felix Simione (Economist, IMF), Jana Kunicova (Lead Public Sector Specialist, EAEG1), and Samer Al-Samarrai (Senior Economist, HAEE1) peer reviewed the report and provided useful comments. The team is also grateful for the good collaboration sustained with the Government of Mauritius. Contents Executive Summary 6 I-Modernizing Fiscal Policies and Upgrading Public Finance Management to Strengthen Macroeconomic Stability 14 and Boost Economic Growth 1. Introduction 14 2. Overview and Macroeconomic Context 15 2.1 Mauritius has an opportunity to adjust its fiscal policy framework to sustain robust growth in the 15 post-pandemic era a) Supported by enabling fiscal policies, Mauritius has developed rapidly over the past 50 years 15 and is now one of Africa’s most secure and prosperous countries b) Over the past decade, government expansionary spending to sustain demand-led growth has begun 16 to undermine macroeconomic stability and hinder growth c) As the economy recovers from the pandemic, the government has an opportunity to revise its fiscal 20 policies to strengthen macroeconomic stability and boost resilience 3. Fiscal Policy Framework 22 3.1 Increasing revenue mobilization and streamlining tax expenditures will be necessary to maintain spending 22 at current levels a) Revenue mobilization has increased since 2014 but remains below the average for comparator groups, 22 with very limited social contributions b) The taxation system is sophisticated and has seen several reforms in recent years, but indirect taxes 24 continue to account for the bulk of government revenue c) Consolidating and reducing tax expenditures will help minimize inconsistencies and leakages, 27 enhance transparency, and improve equity 3.2 Increasing the allocative and technical efficiency of public spending could greatly enhance the impact of a 29 limited fiscal envelope a) Public spending levels in Mauritius are below those of structural and aspirational peers yet consistently 29 higher than revenues, resulting in persistent fiscal deficits and mounting debt levels b) Reversing the fiscal inefficiencies built up over the pas

FAQs

What is the main objective of the Mauritius Public Expenditure Review?

To modernize fiscal policies and upgrade public finance management so Mauritius can strengthen macroeconomic stability and boost growth in the post-pandemic period.

How does the report propose improving fiscal outcomes through the fiscal policy framework?

By increasing revenue mobilization, streamlining tax expenditures, consolidating and reducing tax expenditures to improve transparency and equity, and enhancing the efficiency of public spending.

What approach does the report recommend for managing fiscal risk?

Close monitoring of contingent liabilities to gain insight into overall fiscal risk and support well-informed fiscal policy decisions.

Jul 19, 2026

Upload by Hazel