Inflation in Mauritius

A short history of inflation in Mauritius

The End of the Preferences (2006)

Mauritian inflation peaked at 12.3% in the year to September 2006. Two trade arrangements the island had been built around ended within a year of each other: the quota system that had guaranteed its clothing exports a place in rich-country markets expired in 2005, and the European sugar protocol, which had bought Mauritian sugar well above the world price, was reformed from 2006.

Both squeezed export earnings at once, the rupee fell by more than a tenth, and oil was rising. Budget measures that year added to the step. The economy that emerged is built on tourism and financial services rather than sugar and textiles, and its inflation has been calmer since.

Post-Covid Inflation (2021 to 2023)

In Mauritius, prices rose fastest in December 2022, at 12.2%. The causes of the post-Covid inflation were global in nature, beginning with the lockdowns: factories and ports closed and the shipping between them fell out of sequence, so goods took longer to make and longer to arrive. Governments had spent heavily supporting household incomes through those closures, so when restrictions lifted there was money waiting to be spent and not enough on the shelves to spend it on. Then in February 2022 Russia invaded Ukraine, disrupting two of the world's largest suppliers of wheat, fertiliser, oil and gas at once, and the cost of everything grown, heated or transported rose with them.

Because the causes were shared, so was the timing: most countries peaked within a few months of one another in late 2022. The major inflation events covers this episode and the others in more detail.