May 29, 2020 / 3:01 PM / a month ago

UPDATE 1-Mauritius economy to contract sharply due to virus, says bank governor

(Adds details, background)

NAIROBI, May 29 (Reuters) - Mauritius’s economy is expected to contract by between 7.5% and 15% in 2020 due to the effects of the coronavirus, which have hit its tourism, manufacturing, and transport sectors, the central bank governor said on Friday.

Governor Harvesh Seegolam said in a statement that these sectors, alongside information and communications, business and administrative activities, and wholesale and storage, made up almost 40% of gross domestic product. The bank had in March forecast growth of 2.6% to 2.8% this year.

“The contraction in output this year will be severe,” Seegolam said.

Mauritius has 334 confirmed cases of the coronavirus, 322 recoveries and 10 deaths. It has suspended international passenger travel, restricted movement on the island, and allowed only essential businesses to stay open.

Seegolam said tourism, another important sector, had also slumped and that in April and May alone, the sector had lost 12 billion rupees in foreign exchange.

Last year, the sector earned 63 billion rupees.

“This year, as long as the tourism industry remains inoperative, there will be significant shortfalls in foreign exchange receipts,” he said.

“The pressure on foreign exchange earnings will be amplified by the shortfall in export earnings in other sectors as well, such as textile and fish products.” (Reporting by George Obulutsa; editing by Giles Elgood)

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