Mauritius unemployment rate is expected to rise due to current downward trend in the global economy, the Chief Executive officer at Island Premier Global Markets told CNBC Africa on Wednesday.
“Mauritius is an export led economy, heavily dependent on its service sector. With international demand slowing down due to the global economic slump, especially from Europe’s textile industry, job layoffs are bound to increase,” said Mark O’sullivan, CEO Island Premier Global
“I just think it’s reflective of what’s going on in the global economy.” Mauritius unemployment rate is expected to increase from 8.1 per cent in 2012 to 8.3 per cent in 2013.
O’sullivan states that the construction sector will experience the highest number of job cuts due to many infrastructure projects coming to an end.
“There was fairly heavy construction spending and building in the last five years, now with the global economy being in a trough and with Mauritius being an island economy, it’s difficult to justify continuous spending ,” says O’sullivan.
All construction on major shopping malls as well as Cyber City, the information technology hub that links African and Asian markets based in Ebene city, have reached completion.
O’sullivan adds that there are currently no infrastructure projects in the pipeline that will spur construction on for the island.
Mauritius central bank cut the key base rate by 25 basis points, in line with the fact that construction activity was slowing down.
O’sullivan believes that the current situation in Mauritius is not unique as many countries are experiencing similar socio economic issues, and that as the global economy recovers, so will Mauritius. “The growth may be slow, but it will happen,” he concludes.