(Ecofin Agency) - Mauritius must reinforce its monetary policy to tackle shocks and contain inflation which threatens its economy, according to the International Monetary Fund (IMF). “Inflationary pressures spurred back due to the offer’s shocks, however they are solutions to contain it,” said a team from the institution at the end of its annual mission in the country.

“Government should tackle inflationary pressures by reinforcing monetary policy, while modernizing its framework to provide appropriate answers,” IMF’s team added.

Last year, the main interest rate of Bank of Mauritius, the repo rate, was kept at 4%. According to the Bretton Woods institution, global inflation should stand above 5% throughout the second half of this year.

The inflation, last month, slumped back to 5.3% year-to-year against 6.4% in June, figures from the statistics office show.

Regarding forecasts, IMF’s match those of the Mauritian government for the economy. Real GDP is expected to grow 3.9% this year, driven mainly by the construction industry.

Fiacre E. Kakpo