Response from Navin Ramgoolam: The Government is Doing Everything to Avoid a Downgrade by Moody’s
As Mauritius's sovereign rating approaches speculative status, the government claims to be strengthening its actions to maintain the country’s investment status. This is aimed at avoiding a downgrade that could have significant economic consequences. On Tuesday, in Parliament, Prime Minister Navin Ramgoolam responded to a question from MP Raviraj Beechook. He assured that "the government is doing everything to prevent another downgrade" and reminded that Mauritius remains "under close surveillance by Moody’s."
In his address, the head of the government traced the evolution of the sovereign rating, attributing the current situation to "poor economic management and irresponsible budgetary management by the previous government." He recalled that in June 2012, under his administration, Moody’s had upgraded the rating from Baa2 to Baa1 with a stable outlook. At that time, he specified, "public debt represented 59.5% of GDP, which is below 60%, as recommended by the European Union."
According to him, the situation deteriorated starting in 2020, marked by "a clear abandonment of prudent budgetary discipline," which eroded confidence in the sustainability of public finances. Moody’s subsequently carried out a series of downward revisions: a change in outlook to negative in April 2020, a downgrade to Baa2 in March 2021, then to Baa3 in July 2022, before reverting the outlook to negative in January 2025, marking "the lowest level of the investment category."
Navin Ramgoolam emphasized the seriousness of the situation: "Based on Moody’s quantitative criteria alone, we should have been downgraded to speculative status." In light of this risk, the government launched a series of actions, including sending a high-level delegation to London to meet with leaders of the rating agency. The aim was to present "our budgetary consolidation plan and our commitments to structural reforms."
Among these reforms is the pension reform, deemed "unsustainable" by the International Monetary Fund (IMF) and the World Bank. "They had already raised the alarm under the previous government, but it turned a blind eye," the Prime Minister stated. He believes that "we avoided downgrade thanks to our intervention and the bold budgetary consolidation measures implemented."
He also detailed the effects of a potential downgrade to speculative status. It would have caused "a decrease in investor confidence," potentially slowing down foreign direct investments or leading to capital outflows. "This would have led to a depreciation of the rupee, increasing the cost of imports and inflationary pressures," he explained.
Cascading Effects
Navin Ramgoolam added that "the reduction in investments, rising costs, and depreciation of the rupee would have led to a decline in economic growth." Furthermore, such a downgrade would have affected the banking system, leading to "a downgrade of commercial banks’ ratings," making international operations "more difficult and expensive."
The head of the government stressed the direct impact on the population: "This would have had cascading effects on purchasing power and living standards." He particularly mentioned the sensitivity of non-resident deposits to the sovereign rating, warning that "a downgrade could trigger significant capital outflows and destabilize the foreign exchange market," which is already under pressure.
To anticipate these risks, the macroeconomic coordination committee - comprising the Prime Minister’s Office, the Ministry of Finance, the Bank of Mauritius, Statistics Mauritius, and the Economic Development Board - "closely monitors the evolution of the sovereign rating." It also conducts "scenario analyses and stress tests."
Non-renewal of the Standard & Poor’s Contract
Navin Ramgoolam also addressed the issue of the rating by Standard & Poor’s (S&P), noting that the contract was not renewed in March 2026. "In principle, the sovereign rating is the responsibility of the government through the Ministry of Finance," he stated, dismissing criticisms about a lack of transparency. He recalled that S&P's last rating, published in October 2025, placed Mauritius at "BBB with a negative outlook, the lowest level of the investment category."
He highlighted the measures taken to restore budgetary discipline and strengthen the country’s credibility. He pointed out that Mauritius has become "the first African country to achieve the IMF’s SDDS Plus standard," evidence, according to him, of an increased commitment to transparency in economic data. The country has also benefited from technical assistance from the IMF regarding the budgetary responsibility framework. "All these actions demonstrate the government's strong commitment to anchoring budgetary discipline and consolidating Mauritius’s reputation as a credible investment jurisdiction," he declared.
Navin Ramgoolam asserted that the government will continue its budgetary consolidation program to "gradually reduce the deficit and public debt to sustainable levels." It will also focus on "rebuilding the economy and placing it on a path of higher growth, with shared benefits for the entire population."
