The Budget 2020-2021 has been presented in an exceptional context amid severe ramifications of the coronavirus outbreak on the economy and public finances. According to the budget estimates, the Mauritian economy contracted by 5.8 percent during the financial year 2019-2020 and is expected to shrink by a further 7 percent in 2020-2021. A return to positive growth is not anticipated before 2022.
One of the consequences of the economic recession is a significant drop in tax revenue. The shortfall in revenue from taxation in 2020-2021 compared to the year 2018-2019 is estimated at 8 percent.
Despite the scale of the economic impact of the Covid-19 crisis, Government has maintained its social spending under the welfare state and the different social protection schemes for the vulnerable.