Mauritius Budget 2025-2026: From Abyss to Prosperity
On June 5, 2025, Prime Minister Dr. Navinchandra Ramgoolam presented the Budget Speech 2025-2026, titled "From Abyss to Prosperity: Rebuilding the Bridge to the Future." The speech outlined a bold and transformative plan to address the economic and social challenges inherited from the previous administration while laying the foundation for a resilient, inclusive, and innovative Mauritius.
A Vision for Recovery and Growth
The Prime Minister emphasized the dire state of the economy, citing unsustainable public debt, a high budget deficit, inflationary pressures, and a significant trade imbalance. He described the inherited situation as "unsustainable" and stressed the urgent need for structural reforms to avoid further economic deterioration.
The Budget is built on three key pillars:
- Economic Renewal: Transitioning to a new economic model driven by innovation, research, and transformative investments.
- A New Social Order: Prioritizing inclusiveness, social justice, and the well-being of the population.
- Fiscal Consolidation: Restoring financial stability while protecting vulnerable groups.
Economic Renewal: Innovative Mauritius
The government is shifting to an investment-led growth model, replacing the consumption-driven approach of the past. Key initiatives include:
- Establishing a National Research and Innovation Institute (NRII) to drive innovation.
- Launching an AI Innovation Start-Up Programme and integrating AI into public services and education.
- Promoting transformative investments in renewable energy, waste-to-wealth projects, and the blue economy.
- Reimagining tourism with a focus on sustainability, quality, and inclusiveness.
- Supporting innovative agriculture to enhance food security through vertical farming and AI-driven solutions.
A New Social Order: Empowering People
The Budget places people at the center of decision-making, with significant investments in education, healthcare, housing, and social security:
- Rs 438 million allocated for education infrastructure, with plans to make Mauritius a regional hub for higher education.
- Rs 18.5 billion for healthcare, including reforms to modernize hospital management, combat noncommunicable diseases, and introduce digital health solutions.
- Rs 90 billion for social protection, including increased pensions, housing support, and financial aid for vulnerable groups.
- Rs 3.3 billion for environmental initiatives, including renewable energy projects and waste management reforms.
Fiscal Consolidation: Balancing Responsibility with Compassion
The Prime Minister outlined a strategy to reduce inefficiencies, cut waste, and rationalize public spending. Key measures include:
- Setting a target to lower public debt to 75% of GDP within three years and 60% in the long term.
- Introducing fair-share contributions from high-income earners and profitable corporations to support fiscal stability.
- Reforming the pension system to ensure sustainability while maintaining support for vulnerable groups.
Tax Reforms
The Budget introduces significant tax reforms to simplify the system and promote equity:
- Personal income tax bands reduced to three, with 81% of employees exempt from income tax.
- VAT registration threshold lowered to Rs 3 million, and VAT extended to specified digital services.
- Excise duties on vehicles reintroduced to address road congestion and foreign currency drain.
Infrastructure and Investment
The government plans Rs 128 billion in infrastructure investments over the next five years, including housing, transport, water, and energy projects. Major initiatives include:
- Construction of the Rivière des Anguilles Dam to address water shortages.
- Expansion of port facilities to enhance Mauritius' position as a regional trade hub.
A Message of Hope
Dr. Ramgoolam concluded the speech with a call for unity and shared responsibility, emphasizing the government's commitment to balancing fiscal consolidation with empathy and compassion. He assured the population that the choices made today would pave the way for a brighter future.
The Budget 2025-2026 is a bold step toward rebuilding Mauritius, transforming it into an innovative, inclusive, and resilient nation. It reflects a government determined to address past challenges while creating opportunities for future generations.