* GDP growth seen at 3.7 pct in 2013, 4.4 pct in 2014
* Policy should be tightened if inflation accelerates
* Public debt to fall below 50 pct GDP by 2018
(Adds details, quotes)
By Jean Paul Arouff
PORT LOUIS, April 9 Mauritius' economy will
expand by 3.7 percent this year, slightly below potential due to
subdued demand from its main markets and modest private
investment, and will accelerate to 4.4 percent in 2014, the
International Monetary Fund said.
The Washington based-body estimated gross domestic product
grew 3.3 percent in 2012 and said that external shocks posed the
largest risk to the outlook.
"Heavy dependence on demand from Europe for key services
exports and declining competitiveness are particular sources of
risks going forward," the IMF said in a statement released late
on Monday, adding inflation would be about 5 percent in 2013.
Amid a festering debt crisis and stagnant economic growth,
Europeans have cut down on the number of long-haul holidays
taken to sun-drenched destinations like the Indian Ocean. Weak
sugar and textile exports and a slowdown in the construction
sector also contributed to the deceleration in growth last year.
The IMF welcomed the low and stable inflation
delivered by the central Bank of Mauritius, although it
cautioned that excess liquidity remained elevated and said wage
rises might fuel inflationary pressures this year.
"The current accommodative monetary policy stance remains
appropriate, but the authorities should stand ready to tighten
monetary conditions if inflation accelerates beyond current
expectations," the IMF said.
The current account deficit will narrow gradually to 7
percent by 2018 thanks in part to sustained fiscal changes to
improve competitiveness. The IMF also said Mauritius was well
placed to cut its public debt to below 50 percent of GDP by 2018
from its current level of around 56 percent.
(Reporting by Jean Paul Arouff; Writing by Richard Lough;
Editing by Edmund Blair)