Finance Minister Ranganaden Padayachy has maintained that the country’s economic growth will be 9% for the fiscal year 2021-2022. He said the opposition is wrong about the budget deficit. “Some are worried about the VAT revenue at Rs 39.5 billion. Let me reassure the House that this is not the case. We expect nominal GDP in FY2021-22 to be around Rs 499.8 billion and total consumer spending in the economy to be around Rs 466.3 billion. The estimated VAT revenue will be 8.5 per cent of the total consumer expenditure in the economy,” the Finance Minister said during the budget summing-up. This budget will allow the country to achieve multiple and ambitious goals without jeopardising the sustainability of public finances. The approach that this government has always taken to budgetary matters is one of responsibility and fairness towards taxpayers and future generations. He reiterated the objective of putting the level of the budget deficit and public sector debt on a downward trajectory.
“From a fiscal consolidation perspective, our goal is to improve the sustainability of our debt as we move towards economic recovery. Despite what has been falsely argued by members of the opposition, our debt is overwhelmingly domestic at 79% to be precise,” he said. The opposition leader, he said, accused the government of manipulating the figures. “How can we believe him when according to his own calculations, the Rs 28 billion contribution of the Bank of Mauritius to the government would be 30% of our GDP? Such incompetence in handling figures coming from a chartered accountant makes one wonder. We now understand why his leader, who is always behind him, calls him the worst finance minister,” said Renganaden Padayachy. The goal is to reduce public debt to below 80% of GDP by 2025 and 70% by 2030.
“Our public sector debt has indeed increased to meet the rising Covid-19 related expenditure while our revenues have declined. I would like to recall that the recent IMF mission considers our public sector debt to be reliable given its structure. The IMF supports the strategy undertaken by Mauritius to limit the impact of the crisis on our economy,” added the Finance Minister. “At the end of December 2019, which is before the start of the pandemic, many countries had a debt level higher than Mauritius’ debt level,” he said. He cited as example, Singapore whose debt stood at 111% of GDP and that of Japan, whose deficit stood at 200% of GDP for the same period. “No matter what the critics of opposition say, we have chosen the path of responsibility. Together we have. Together we will recover and together we will renew economic growth,” said the Finance Minister. The implementation of the announced measures will enable the country to achieve an economic growth of 9% for the fiscal year 2021-2022 and this means that the GDP will reach the threshold of Rs 500 billion.
