Salary Compensation: Verdict Expected This Friday

The amount for salary compensation will be revealed this Friday, December 12, following the Cabinet meeting. Unions are demanding compensation ranging from Rs 855 to Rs 1,792, while employers advocate for a targeted approach based on a 3.7% inflation rate for low salaries (below Rs 18,000). The government will have to make a decision. The Prime Minister has reminded everyone of the economic constraints, referencing Moody's reservations about the pace of public debt reduction.

Navin Ramgoolam, Prime Minister: "Moody's is not 100% satisfied with our debt level."

"We have made significant efforts to stabilize the economy, and it is crucial that discussions reflect the country's economic reality," stated Prime Minister Navin Ramgoolam during the tripartite meeting on salary compensation he chaired on Thursday, December 11.

He noted that at that same time, representatives from the rating agency Moody's are on a mission in Mauritius. "Yesterday (editor's note: Thursday), I had an in-depth discussion with them for over an hour. They also met with Deputy Prime Minister Paul Bérenger," he specified.

The level of Mauritius' public debt has been at the center of discussions. "Moody's is not 100% satisfied with the efforts made to reduce public debt," he emphasized.

According to Navin Ramgoolam, the agency acknowledges the efforts made but believes that the debt has not decreased as much as the government desired. "We have indeed made efforts, but then adjustments were necessary, which caused the debt to rise slightly," he added.

Navin Ramgoolam also reminded that the public debt, which previously exceeded 90%, is currently around 89%. "We are committed to gradually reducing it to 75% by 2030. But let's be clear: we were on the verge of being downgraded right after the Budget. However, Moody's acknowledged the bold measures we have taken, particularly concerning pensions and the Generalized Social Contribution (CSG). The agency has perceived our determination to reduce debt but expects more efforts from us," he explained.

The Prime Minister added that Mauritius remains in the "investment grade" category, with a rating of Baa3. "In the event of a downgrade, we would fall into ‘junk status’, which would be catastrophic," he warned.

Navin Ramgoolam thus calls for caution. "Everything depends on our growth, our ability to meet our commitments, and especially our capacity to further reduce our debt. The Cabinet will decide this Friday on salary compensation. We must act responsibly," he concluded.