Budget Brief 2025/2026

It is at a critical crossroads that we meet the Honourable Prime Minister, Dr Navin Ramgoolam, who also assumes the role of Minister of Finance (PM-MoF), presenting his first budget under this new mandate. The electorate, through a decisive 60-0 landslide victory for the Alliance du Changement, signalled a strong desire for a clear break from the past. This overwhelming mandate gives the new administration, at least on paper, the political capital required to implement bold reforms. However, a sobering audit of public finances released in the State of the Economy Report (SOE) late last year revealed a far more fragile economic situation than previously understood. The report flagged a budget deficit of 6.7% of GDP for FY24/25 and a public debt burden nearing 90% of GDP — clearly signalling the unsustainability of the current fiscal trajectory and reshaping expectations regarding campaign promises.

Against this constrained fiscal backdrop, the PM-MoF delivered a budget aiming to strike a delicate balance: implementing tough but necessary fiscal consolidation measures while preserving the social safety net. Central to the strategy is a three-year fiscal consolidation plan designed to arrest the deterioration of the sovereign credit profile.

 

Read budget brief for 2025-2026 here.