Mauritius’ economic expansion will slow slightly to 4 percent in 2012 but the Indian Ocean island’s current account will swing into surplus for the first time in more than a decade, its finance minister said in a 2012 budget reading.
Three months into the job, Xavier Duval told parliament that public sector debt would remain flat at 54 percent and that he was abolishing a solidarity tax on dividends and interest that was levied on high income earners in the 2011 fiscal budget.
“During the next three years we will set growth on a more steady course,” Duval told parliament. Economic growth next year would tick down from a forecast 4.2 percent in 2011, Reuters reports.
The finance minister revised Mauritius’ budget deficit for this year down to 3.8 percent from the 4.3 percent announced in last year’s budget. Duval told Reuters last month that a large chunk of the government’s spending plan had not been put into action, cutting expenditure.
Duval was appointed in August after his predecessor Pravind Jugnauth resigned over corruption allegations levelled at another cabinet minister in the coalition government from his own party.
Jugnauth was then also arrested over graft charges relating to the scandal involving the purchase of a private hospital.
In a Reuters interview last week, Duval said Mauritius needed to prepare itself for recovery and tap new markets outside the sluggish euro zone.
Public expenditure next year was set at 90.5 billion Mauritius rupees ($3.12 billion), while revenues would total 76.9 billion rupees, he said.
“Budget 2012 is about making things happen. It is a credible plan to fight exclusion to combat absolute poverty, democratise the economy, create more jobs, bolster the confidence of businesses and set a strong base for sustainable development,” Duval said.
Seeking to underscore the budget’s commitment to supporting small businesses, Duval said:” “After protracted negotiations the banking sector has agreed to release 3 billion rupees at 3 percent above the repo rate for small and medium enterprises.”