Outlook for 2011-12

• With a large majority in the National Assembly, the government coalition, headed by Navin Ramgoolam, the leader of the Labour Party, is secure in office.
• The main issue on the political agenda will be constitutional and electoral reform, which offers fertile ground for political controversy.
• The focus of economic policy, apart from the prudent management of public expenditure, will be on developing and supporting the economy during a period of economic uncertainty in Europe, Mauritius's main export market.
• In the longer term the government wants to reduce the economy's dependence on the slow-growing developed world and increase its links with the fast-growing developing economies.
• Real GDP growth in Mauritius is forecast to fall from an estimated 4% in 2010 to 3.7-3.9% in 2011-12 as the economic recovery slows in Europe and the US-the destination of more than 70% of Mauritius's exports.
• The current-account deficit is forecast to rise from an estimated 8.8% of GDP in 2010 to 10% of GDP in 2011 as the trade deficit widens, before falling to 9.5% of GDP in 2012 owing to the increasing surplus on the services account.

Monthly review

• The defection of 11 senior members of the Union nationale (UN) to the Mouvement socialiste militant will probably lead to the UN's demise.
• The murder of an Irish tourist on honeymoon in Mauritius has sent shockwaves through the island, raising questions about tourist safety and leading to calls for the return of the death penalty.
• According to the 2011 Index of Economic Freedom, Mauritius enjoys greater economic freedom than any other Sub-Saharan country and ranks 12th in the world, ahead of the UK.
• Annual inflation rose from 3.9% in November to 6.1% in December and 6.4% in January, following the rise in world oil and food prices.
• Tourist arrivals grew by 10.7% in December, bringing total annual growth to 7.3%; the government hopes that arrivals will top 1m in 2011.
• Sugar production fell by 3.1% in 2010 and may fall further in 2011 as growing conditions are worse than in 2010 and acreage appears to be declining.
• The government is considering building a US$2bn oil refinery, to enter production in 2015; environmental groups have expressed concern.
• Mauritius and China have signed a US$9m economic and trade co-operation agreement; two-thirds of the money, to be spent on as-yet-unspecified projects, will be in the form of grants.