Mauritius recorded a balance of payments deficit of Rs2.6 billion in the second quarter of this year. This is according to the latest report “Balance of Payments (BoP) Developments: Preliminary estimates for Second Quarter of 2021 (2021Q2)” released by the Bank of Mauritius on Thursday, September 23, 2021.
The current account deficit of the balance of payments, estimated at Rs12.8 billion in the second quarter of 2020, widened to Rs18.5 billion in the second quarter of this year. According to the central bank, “the widening current account deficit is due to the increase in the goods, secondary income and services account deficits.
In the second quarter of 2020, the country had recorded a deficit of Rs3.9 billion in its balance of payments. Relative to GDP, the current account deficit in the balance of payments was estimated at 16.1% of GDP in the first quarter of 2021, compared to 6.8% in the first quarter of 2021.
Indeed, merchandise imports rose dramatically by 39.7% from Rs34.2 billion in Q2 2020 to Rs47.8 billion in Q2 2021. The main reasons for this increase were higher imports of fuels, chemicals and manufactured goods classified by material.
However, merchandise exports increased by a robust 58.7% from Rs12.3 billion in Q2 2020 to Rs19.4 billion in Q2 2021. This increase was driven by higher exports of clothing, apparel, textile yarns, fabrics and fish and fish preparations, the Bank of Mauritius said.
The services account deficit increased to Rs3.3 billion in the second quarter of 2021 from Rs1.1 billion. The main cause was attributed to the effect of the COVID-19 pandemic, with tourism revenues falling significantly from Rs1.9 billion in the second quarter last year to Rs0.4 billion in the second quarter of this year.
In the second quarter of 2021, the primary income account shows a surplus of Rs13.4 billion. However, the secondary revenue account shows a deficit of Rs3.8 billion, compared to a deficit of Rs1.6 billion in Q2 2020. Net borrowings of Rs20.3 billion were incurred in the financial services account in Q2 2021. The central bank also notes that foreign direct investment flows to Mauritius, including transactions by global business licensees, were around Rs32.8 billion in Q2 2021. The portfolio investment account would have posted a net outflow of Rs46.7 billion in the second quarter of this year. It is also worth noting that net investment by non-residents in the Stock Exchange of Mauritius amounted to Rs0.3 billion in Q2 2021, compared to Rs0.6 billion in Q2 2020. The balance of payments covers all transactions of imports, exports, money and capital transfers and financial investments between Mauritius and the rest of the world.
