At its meeting on 9th November 2018, the Monetary Policy Committee (MPC) of the Bank of Mauritius (Bank) decided to keep the Key Repo Rate (KRR) unchanged at 3.50 per cent per annum.

The decision was taken based on several considerations. First, the downgrading of global forecasts and global economic uncertainties. The MPC noted that the IMF has, in its October 2018 World Economic Outlook, revised down its growth projections for 2018 and 2019 by 0.2 percentage point to 3.7 per cent. Also, the forecast for global inflation has been revised up to 3.8 per cent in 2018 and 2019.

At the domestic level, the MPC noted that headline inflation is projected at around 3.2 per cent in 2018, compared to 3.7 per cent last year, and forecasts an inflation rate of 3.0 per cent for 2019.

The Bank expects GDP growth to maintain a rate of 4.0 per cent for 2018, based on an increase in activity in the key sectors of the economy. It observed that an increase in consumption expenditure and public infrastructure investment are supporting economic growth and forecasts real GDP to grow by 4.0 per cent in 2019. The Bank also noted that the unemployment is expected to decline to 6.0 per cent in 2018.

Considering the above, and assessing the risks to growth and inflation outlook, the MPC viewed that the current monetary conditions are appropriate and supportive of economic growth and price stability.