PORT LOUIS, Mauritius — Mauritius should introduce comprehensive fiscal responsibility legislation and strengthen its budget institutions after years of breaches of the country’s statutory debt limit and persistent gaps between fiscal plans and outcomes, according to a new International Monetary Fund technical assistance report.
The IMF report, published Sept. 16, says Mauritius’ existing public financial management framework has not been effective in enforcing fiscal discipline and accountability. It recommends a fiscal responsibility law combining numerical and procedural rules with stronger transparency, independent oversight, corrective mechanisms and narrowly defined escape clauses.
The report follows an IMF Fiscal Affairs Department mission to Port Louis from Feb. 11-24, 2026, led by Torben Hansen. The mission was requested by Junior Finance Minister Dhaneshwar Damry and met with Prime Minister and Finance Minister Navinchandra Ramgoolam, Deputy Prime Minister Paul Raymond Berenger, other ministers, lawmakers and officials from the Ministry of Finance.
The IMF said Mauritius has a strong record of economic development and previously benefited from sound institutions and prudent macroeconomic management. But fiscal outcomes have weakened since the COVID-19 pandemic, with higher public debt, large budget deficits and increased exposure to fiscal risks.
“The statutory debt limit stipulated in the Public Debt Management Act was breached repeatedly since its introduction in 2008,” the report said. Public sector debt reached 88.5% of gross domestic product at the end of fiscal year 2024/25, above the revised statutory threshold of 80%.
The report also said budget deficits have exceeded planned levels in every year since the pandemic. In fiscal 2024/25, the deficit reached 9.3% of GDP, compared with a projection of about 5%, according to the IMF.
The government amended the statutory debt limit to 80% of GDP in 2024. Its medium-term fiscal objectives include achieving a primary budget surplus, reducing public-sector debt to about 75% of GDP by the end of fiscal 2030 and to 60% by the end of fiscal 2035.
The IMF said the planned fiscal responsibility legislation should complement the existing 80% debt anchor with an operational fiscal rule and should cover at least the central government to reduce the risk that spending is shifted to entities outside the rule’s coverage.
It also recommended independent monitoring of compliance with the law, correction mechanisms for breaches and narrowly defined escape clauses for exceptional circumstances.
The report stressed that numerical limits alone would not be sufficient.
“Procedural rules are essential and necessary ingredients to any fiscal framework,” the IMF said, warning that without them, numerical rules may not be effectively implemented and accountability and transparency could remain “declarations of intent.”
The proposed framework would require stronger medium-term fiscal planning, including a Cabinet-approved medium-term fiscal framework, clearer responsibility for its preparation and approval, disclosure of assumptions and forecasts, and explanations for significant deviations from earlier projections.
The IMF also called for a formal strategic, top-down phase at the beginning of the annual budget cycle, supported by a fiscal strategy paper and ministerial expenditure ceilings. The budget calendar should be revised to incorporate that strategic phase, while the government should also prepare a citizen’s budget, it said.
Forecasting is another major area identified for reform. The Ministry of Finance should gradually expand its capacity to prepare the macroeconomic forecasts used in the medium-term fiscal framework, formalize the existing Macroeconomic Coordination Committee and regularly assess forecasting performance, the report said.
An independent fiscal institution should also have a mandate to assess the government’s macroeconomic forecasts, according to the recommendations.
The IMF said Mauritius also needs a stronger system for identifying and managing fiscal risks, including risks linked to extra-budgetary entities and state-owned enterprises.
It recommended an overarching legal framework for such entities, improved governance and reporting requirements, and development of a formal Fiscal Risk Statement. The government should also publish quarterly budget-execution reports and provide a more comprehensive midyear review covering fiscal developments, revised forecasts and the fiscal outlook.
The report identifies seven recommendations covering the design and implementation of the proposed legislation and supporting public financial management reforms. It says Mauritius should prioritize drafting the law and developing an implementation plan during the remainder of 2026, while simultaneously strengthening macro-fiscal forecasting and beginning work to reduce fiscal risks.
The IMF cautioned that the legislation would not be an immediate solution to Mauritius’ fiscal challenges.
“An FRL is not a ‘magic bullet’ and will take time to develop and implement,” the report said, adding that “getting it right” should take priority over moving quickly.
The report said the Ministry of Finance has substantial technical knowledge and skills but relatively limited staffing compared with larger countries, making careful sequencing of reforms important.
Mauritius’ fiscal challenges come as the country faces significant public investment needs related to climate change, an aging population and productivity, while public debt remains elevated. The IMF’s latest Article IV assessment said public debt was about 86% of GDP at the end of June 2025 and projected it to remain around 87%-88% of GDP over the medium term under current policies, above the 80% debt anchor.
The IMF said the proposed reforms are intended to strengthen accountability, improve adherence to fiscal rules and rebuild fiscal buffers over time. The technical assistance mission was supported financially by the European Union through its Public Financial Management Partnership Program and by AFRITAC South.
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