Economics

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Economics for business

TABLE OF CONTENTS
Question 1
................................................................................................................................ 3 Overview of the Mauritian Economy
........................................................................................ 3 Economic Indicators
............................................................................................................ 4 GDP
....................................................................................................................................... 4 Inflation Rate
......................................................................................................................... 6 Unemployment Rate
............................................................................................................... 7 Balance of Payments (BOP) Current Account
........................................................................... 8 Exchange Rate
..................................................................................................................... 10 Public Debt
.......................................................................................................................... 12 Future Prospects
.................................................................................................................. 12 Conclusion
........................................................................................................................... 13 Question 2
.............................................................................................................................. 14 Overview of ‘Air Mauritius’
................................................................................................... 14 Vulnerability and Degree of Exposure to Macroeconomic Shocks ..........................................14

Question 3
.............................................................................................................................. 17 Conclusion
........................................................................................................................... 17

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QUESTION 1

SELECT A MACRO-ECONOMY TO STUDY. IT COULD BE THE US, JAPAN,
GERMANY OR THE ECONOMY OF YOUR OWN COUNTRY. ASSESS THE PAST, CURRENT AND FUTURE PROSPECTS FOR THE ECONOMY FOCUSING ON THE AGGREGATES, I.E. GDP GROWTH, INFLATION, UNEMPLOYMENT, NOMINAL EXCHANGE RATE, THE BALANCE OF PAYMENTS, PUBLIC SECTOR

BORROWING, INTEREST RATES AND SO ON.

OVERVIEW OF THE MAURITIAN ECONOMY
Mauritius is a small island economy in the Indian Ocean classified as a middle-income country. From a monocrop sugar producer, successive waves of diversification have transformed the country into an important exporter of textiles and tourism, with ICT, financial services and seafood hub developed into additional pillars. In the 1980’s and 1990’s Mauritius registered high growth rates averaging about 6%. The traditional productive sectors, namely sugar and textile, have today been weakened by major exogenous shocks: the reduction in sugar guaranteed prices by 36% and the dismantling of the Multi-fibre Agreement, eroding preferential access to EU and US markets. Moreover, the garment manufacturing industry has lost its competitiveness due to the rise in labour costs and intense competition from low-cost garment producers such as China. However, despite those external shocks, Mauritius has proved to be resilient with an average of 5% growth in GDP in years 2006 and 2007. I will in this essay, analyse the past, present and future prospects of the Mauritian economy focusing on economic indicators such as GDP, inflation, unemployment and the balance of payments amongst others.

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ECONOMIC INDICATORS
The table below shows the macro-economic indicators of Mauritius from 2000 to 2007. Given data limitations, the past performance of Mauritius will be assessed over the period...
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