Moody's Keeps Negative Outlook on Mauritius Sovereign Rating Amid Budget Deficit Plan

Moody's retained a negative perspective on Mauritius' sovereign credit rating (Baa3 negative) in its July 31 2026 review, despite the government's announced fiscal consolidation for the 2027 budget. The agency acknowledged early progress, noting the target to cut the deficit to 3.7% of GDP from around 6% the previous year, but said a stable outlook will only follow a demonstrable, durable reversal of the rising public‑debt trajectory.

Moody's highlighted several risk factors: a high level of public debt, the small and highly open nature of the economy, vulnerability to external shocks, and a slight erosion of institutional strength. It also excluded any potential revenue from the Mauritius‑UK agreement on the Chagos Islands and pointed to the recent partial suspension of pension‑reform measures as a concern. The agency said it remains open to upgrading the outlook if confidence in the government's fiscal commitment improves.