Mauritius gets 30 mln euro EU grant to aid growth

By Jean Paul Arouff

PORT LOUIS (Reuters) - The European Union (EU) on Monday said it had handed Mauritius a 30.2 million euro grant in direct budgetary assistance to help the Indian Ocean island's reforms towards becoming a high growth economy.

The disbursement, the first tranche of the EU's 2010-2012 budget support programme worth 100.74 million euros, signalled the EU's confidence in Mauritius's economic reforms, said Alessandro Mariani, the EU's ambassador to Mauritius.

"The government of Mauritius has maintained good progress in implementing its economic reform programme, in maintaining a policy of macroeconomic stability and in improving public finance management," Mariani said in a written statement.

Since 2006, the island has embarked on a raft of reforms to slash red tape and lure foreign investors, while donors have praised its coordinated fiscal and monetary response to the global slowdown.

Official government forecasts predict the almost $10 billion economy -- consistently one of Africa's most prosperous and stable -- will grow by 4.2 percent this year compared with an estimated 3.1 percent in 2009.

But its recovery this year has been more sluggish than previously expected, with the crisis in the euro zone (the country's main export market) and relative weakness of the euro against the rupee weighing. The Central Statistics Office in June revised down its 2010 growth forecast from 4.6 percent.

Earlier this month, Finance Minister Pravind Jugnauth unveiled a 12 billion Mauritius rupee stimulus package -- the island's second stimulus since the onset of the global financial crisis -- to target the tourism and export sectors.

The EU has disbursed a further 63.9 million euros worth of grants in the last 10 months.