Avertissement de Moody’s : Maurice maintient sa note Baa3, mais avec une perspective négative, découvrez l’évaluation dans son intégralité

Dans sa dernière évaluation émise très tôt ce vendredi matin, l’agence de notation Moody’s a maintenu la note de Baa3 de Maurice, toutefois, avec une perspective négative (« negative outlook »). Certes, le pays conserve son « Investment Grade », mais se retrouve carrément au bord du précipice. En effet, notre note souveraine était de Baa3 avec une perspective stable depuis juin 2022. 

La perspective négative est une forme d’avertissement et survient après la publication du rapport State of the Economy lorsque le nouveau gouvernement a revu à la baisse les principaux indicateurs macroéconomiques dont la dette publique, qui a été relevée de 77,6 % du PIB à 83,4 % du PIB. 

La note Baa3 avec une perspective négative est la note la plus basse pour un pays ayant un « Investment Grade ». Cela veut dire que si Moody’s abaisse notre note souveraine d’un cran, on passera à la note Ba1. Dans ce scénario, les obligations de l’État mauricien seront considérées comme « junk », c’est-à-dire elles représentent potentiellement un risque de défaut de paiements.

Découvrez ci-dessous l’évaluation de Moody’s dans son intégralité : 

Rating Action: Moody's Ratings changes the outlook of Mauritius' rating to negative from stable; affirms Baa3 ratings
30 Jan 2025

New York, January 30, 2025 -- Moody's Ratings (Moody's) has today affirmed the Government of Mauritius' long-term foreign and local currency issuer ratings at Baa3 and changed the outlook to negative from stable. The outlook change to negative reflects uncertainty about Mauritius' ability to address its challenging fiscal situation, considering the significant and socially and politically difficult fiscal adjustments involved. Following the general elections, the new government released a "State of the Economy" document in December 2024 that revealed a larger fiscal deficit for the fiscal year ending in June 2024 (fiscal 2024), along with a higher debt burden. Given this revision and its implications for the following fiscal year, we now project debt to reach 77% of GDP by June 2025, significantly higher than that of other Baa3-rated sovereigns. However, we also expect the government to pursue a comprehensive fiscal consolidation starting from fiscal 2026, offering the prospect of reversing the fiscal deterioration and maintaining creditworthiness.

The affirmation of the Baa3 rating is supported by Mauritius' diversified economy and proven institutional capacity, which have historically managed economic challenges. Access to a substantial domestic funding base limits the government's exposure to external financing shocks, which would otherwise weaken its debt affordability in times of large deficits. This is balanced against Mauritius' high debt burden, which, in the absence of an effective policy response, will increasingly diverge from the debt ratios of other Baa3-rated sovereigns. Given the size of the global business sector, Mauritius is sensitive to any shift in capital flows, which could have negative implications for the banking sector and balance of payments.

Mauritius' local currency country ceiling remains unchanged at A2. The four-notch gap to the sovereign rating reflects a relatively favorable legal and regulatory framework, sizeable buffers limiting external vulnerabilities and a stable political system, balanced by reliance on tourism which represents a source of common shock for the government and non-government issuers in the country. The foreign-currency ceiling remains unchanged at A2. Mauritius's role as an international financial center significantly reduces the incentives to impose transfer and convertibility restrictions, supporting the foreign-currency ceiling's alignment with the local-currency ceiling.

RATINGS RATIONALE

RATIONALE FOR THE CHANGE IN OUTLOOK TO NEGATIVE FROM STABLE

FISCAL AUDIT REVEALS A CHALLENGING FISCAL SITUATION

Mauritius faces significant short-term fiscal deterioration, which, if unaddressed, would lead to a rising debt burden that would diverge further from those of other Baa3-rated sovereigns. The audit report, "State of the Economy," published by the newly elected government in December 2024 disclosed a larger fiscal deficit and higher debt burden for fiscal 2024 than previously reported. The audit findings do not point to a specific deficiency in data reporting or transparency but rather highlight broader systemic gaps in the country's checks and balances, particularly those related to the oversight of State-Owned Enterprises (SOEs) and budget execution.

The fiscal deficit was revised to 5.7% of GDP, higher than the prior expectation of 3.9%. Furthermore, the government revised its estimate for the fiscal 2025 budget deficit to 7.6% of GDP, up from an original target of 3.4% of GDP. The latter revision reflects both the carryover from fiscal 2024 due to lower revenue and campaign-related spending commitments, which will add to this year's fiscal deficit. We therefore project general government debt to rise to 77% of GDP by June 2025, significantly higher than the Baa-rated median of 58%.

The audit also highlighted the weakened financial position of certain SOEs, increasing the risk of requiring budget support. Several state-owned utilities reported financial losses in the prior fiscal year due in part to subsidized prices and regulatory prices set below cost recovery. At the end of June 2024, SOE debt stood at 10% of fiscal 2024 GDP, with more than half of it guaranteed by the government. The government will likely need to provide fiscal support to service some of this SOE debt as it comes due, adding spending pressure.

ABILITY TO DELIVER SIGNIFICANT FISCAL ADJUSTMENT IS UNCERTAIN

In response to the deterioration in fiscal metrics, we expect the government to pursue a comprehensive fiscal consolidation plan that includes revenue-enhancing measures and spending cuts aimed at reducing the fiscal deficit and putting government debt on a more sustainable path. Over the next 12 to 18 months, we will assess the implementation of such a plan and the ultimate likelihood of success in reversing the fiscal position and eventually lowering the debt burden.

In our central scenario, we foresee the government pursuing a relatively large, front-loaded fiscal adjustment of 2.7% of GDP between fiscal 2025 and fiscal 2026, with government debt stabilizing in fiscal 2026 at 77% of GDP. We assume continued support for SOEs, with approximately 1% of GDP annually in capital injections and transfers to support operating performance, similar to what has been provided in prior fiscal years. With a further fiscal adjustment in the medium-term, Mauritius' debt burden would start falling to reach 74% of GDP by the end of the decade. Even under this scenario, Mauritius' debt burden would be weaker than that of similarly rated peers.

A front-loaded fiscal adjustment involving tax reform and targeted measures to reduce spending, rather than relying on one-off measures, would have a greater likelihood of returning Mauritius' fiscal metrics to the trajectory envisioned prior to the audit. However, there are significant implementation risks. Mauritius is constrained in its ability to raise corporate or personal income taxes as it competes against other low-tax jurisdictions, while raising taxes on consumption, such as value-added taxes, could prove politically and socially unpopular. A large share of social spending – which accounts for 30% of total expenditures – limits the scope to reduce spending without reforms to the welfare system, such as the pension or family allowances, which would also be politically challenging. Moreover, a sizeable fiscal adjustment could have a contractionary impact on growth, limiting the effectiveness of tax policy.

The ability to turn around the financial performance of SOEs will be crucial for limiting spending pressure. However, improving the financial performance of SOEs would also entail measures that would be socially and politically challenging, such as raising regulated prices on items such as water, electricity, and public transport.

AFFIRMATION OF THE Baa3 RATINGS

The affirmation of Mauritius' Baa3 rating reflects the country's economic resilience, supported by relatively high income levels and sustained economic growth, alongside a reasonably diversified economy. Despite its susceptibility to external shocks, Mauritius' track record of resilience and effective policy measures underpins its credit profile. While its debt burden has increased, particularly in response to pandemic-induced challenges, its debt affordability remains manageable, aided by a deep financial sector and prudent debt management strategies.

The country's business-friendly investment environment has attracted foreign investment, mainly in the financial sector, contributing to the accumulation of international reserves. This reserve buffer limits risks from the country's structural current account deficits. As of December 2024, gross official international reserves stood at $8.5 billion, equivalent to more than 13 months of import coverage.