Readying for rebound

By Jean Paul Arouff

PORT LOUIS Mar 31 (Reuters)

Mauritius' economy will grow faster than previously thought this year after weathering the global downturn well, the Central Statistics Office (CSO) said, supported by infrastructure spending and a rebound in key sectors.

Gross domestic product will grow 4.6 percent in 2010 with the high-profile hotel and restaurant sector seen expanding 5.1 percent -- against an overall rise of 3.1 percent last year, the CSO said on Wednesday.

The headline figure undercut a forecast of 4.7 percent to 5.0 percent for 2010 given to Reuters late on Tuesday by Finance Minister Ramakrishna Sithanen.

But it beat a forecast of 4.3 percent made in December by the CSO, which also revised upwards a previous estimate of 2.8 percent for last year.

Last week, the central bank's chief economist put the 2009 growth figure at 3.0 percent.

"(Last year's increase is) mostly due to higher growth in food manufacturing, textile manufacturing, construction and hotels and restaurants, partly offset by a lower growth in the sugar sector," the CSO said.

The manufacturing sector, comprising mainly textiles and food processing, is expected to grow by 2.1 percent this year, up from 1.1 percent in 2009, the statistics office said.

The construction sector is projected to grow by 8 percent against 6.5 percent, thanks in part to public infrastructure projects laid out in the last budget.
Best known for its luxury spas and white sand beaches, Mauritius' hotel and restaurant sector is expected to welcome 915,000 visitors this year, the CSO said.

Finance Minister Sithanen said he expected the tourism sector to grow at about 8-10 percent, and textile and clothing by 3-4 percent. Both are key drivers of the almost $10 billion economy and key sources of foreign exchange.

Earlier this month, Mauritius' Monetary Policy Committee (MPC) said it expected real economic activity to remain below potential over the next few quarters owing to a still subdued performance expected in export sectors.

The committee held the central bank's benchmark lending rate at 5.75 percent for the fourth straight quarter on March 23.

Economic analysts say the Indian Ocean island's economy, consistently one of Africa's strongest performers, has coped better than expected with the global downturn.