The expansion of exports of textiles and clothing, which account for around 50% of domestic exports, will slow in 2011 as demand falls in their main markets-Europe and North America, which took 74% of Mauritius's exports in the first three quarters of 2010. Other manufacturing exports should see a similar slowdown in growth, although fish exports will rise if the weather and fish stocks favour higher production. Overall, we forecast that the value of exports will rise by 1% in dollar terms in 2011, having risen by an estimated 12% in 2010. In 2012 export growth will accelerate to 3% with the upturn in Europe.

Imports are forecast to grow by 5% in 2011, compared with an estimated 19% in 2010 (following a heavy fall the previous year); the slowdown in the economy-and hence import demand-will be offset by higher world commodity prices. The upturn in economic activity in 2012 will stimulate import demand, although the price of commodity imports will fall. As a result, the trade deficit, estimated at 21% of GDP in 2010, is forecast to rise to 22% of GDP in 2011-12.

Services credits should rise in 2011-12, owing mainly to higher tourism receipts, although debits will also rise in line with imports. Nevertheless, the surplus on the services account is forecast to increase. The surplus on the income account, mostly reflecting earnings on investments abroad, is expected to increase slowly. The surplus on the current transfers account will remain roughly stable in 2011-12. As a result of these trends, we forecast that the current-account deficit, which grew to an estimated 8.8% of GDP in 2010, will widen further in 2011, to 10% of GDP, before narrowing to 9.5% of GDP in 2012.