Madam Speaker, the gross economic mismanagement by the previous government during the past decade has severely undermined our macroeconomic fundamentals, and we all know this. It has led, amongst others, a sharp depreciation of the rupee and an increase in the inflation rate, and therefore, the cost of living. In fact, in December 2014, the average exchange rate stood at 31.97 rupees against the US dollar. By October 2024, that is, practically ten years later, it had risen to 46.64 rupees per US dollar, reflecting a depreciation of the rupee by 46 per cent. This significant depreciation of the Mauritian rupee has had far-reaching economic consequences. On the domestic front, it has intensified inflationary pressures, and therefore, raised the cost of goods and services. Inflation surged to a peak of 11.3 per cent in February 2023. It was

18 the highest level for three decades. 11.3 per cent! Between December 2014 to October 2024, consumer prices in Mauritius increased by a dramatic 43.3 per cent. On the external front, the depreciation of the rupee has contributed in the widening of the trade deficit, which stood at a high of Rs180 billion, equivalent to 28.2% of GDP, in 2023. It deteriorated further in 2024, rising from Rs180 billion to Rs207.8 billion, that is, 29.9% of GDP. This reflects the growing imbalances between imports and exports. Madam Speaker, as I have said on numerous occasions in this House, the dire economic situation we face today is a direct consequence of the gross mismanagement of the economy by the previous government. It reflects a striking level of amateurism and incompetence in the handling of the country’s economic affairs, exposing a troubling lack of foresight, and, as I said, competence. Let me highlight a few glaring examples of flawed monetary policies – (a) First of all, the Bank of Mauritius decided to print money to finance the budget deficit; (b) Secondly, the Bank of Mauritius further resorted to more money printing to finance the Mauritius Investment Corporation Ltd. Overall, the Bank of Mauritius injected a total amount of Rs180 billion of liquidity in the banking system. As a result, excess liquidity in the banking system surged dramatically to an unprecedented Rs90 billion in August 2023 alone. This led to a depreciation of the rupee, and, of course, intensified inflationary pressures within the local economy; (c) Third, the increase in the policy rate by a cumulative 265 basis points during 2022 was not enough to solidly anchor inflation expectations and prevent the further depreciation of the rupee; and (d) Fourth, despite expert recommendations to raise the key rate, the Bank of Mauritius chose not only to ignore the expert recommendation, but it did exactly the opposite. In other words, instead of increasing, it decreased the key rate from 4.5 per cent to 4 per cent in September 2024.

19 Now, this negative interest rate gap between the rupee and the US dollar caused a sharp depreciation again of the rupee. Let me now turn to some of the critical policy blunders of the previous regime – (a) First, they favoured an economic model based on reckless consumption and imports. Such a model, built on short-term gains rather than structural resilience, was inherently unsustainable and ultimately detrimental to our economic stability. (b) Secondly, they created a money illusion by giving away a range of allowances and cash handouts. They opted for populist policies that provided short-term relief, but contributed to increasing inflation. (c) Third, they squandered public funds on costly white elephant projects, neglecting critical investments in productive infrastructure, innovation, and the green transition. (d) Fourth, with the reckless spending, they increased the budget deficit and brought the public sector debt to 90 per cent of GDP in June 2025. Madam Speaker, since assuming office, we have implemented a series of measures aimed at steering the economy back onto the path of stability and sustainable growth. We are shifting the economic model away from one that relies heavily on consumption and imports, towards a more sustainable model powered by investment, exports and innovation. We have been able to stabilise the trade-weighted exchange rate of the rupee. In fact, the rupee has recently appreciated against the US dollar due to movements in the international markets. The headline inflation rate has gone down to 2.9 per cent. During the 12 months period, it was 4.5 per cent in June 2024. And, finally, we are implementing a comprehensive fiscal consolidation plan to bring down the budget deficit and the public sector debt to more sustainable levels.

Yes, next question! Third Member for Montagne Blanche and GRSE! Dr. Saumtally!

20 MAURITIAN DIASPORA SCHEME – COMPANIES ACT AMENDMENT – REGISTRATION REQUIREMENT