National Accounts Estimates
September 2009
Highlights

YEAR 2008
GDP growth rate
1. Latest information gathered on the various sectors of the economy indicates that GDP growth for 2008 was 5.0%, lower than the 5.3% growth estimated in June 2009, mainly due to a downward revision in “Other agriculture”, mostly foodcrops. Exclusive of sugar, the growth rate worked out to 5.1% compared to the previous estimate of 5.3%.

Year 2009
GDP growth rate
2. On the basis of latest information gathered on key sectors of the economy and available data for the first semester of 2009, GDP is now forecasted to grow by 2.7%, higher than the 2.5% growth forecasted in June 2009. Exclusive of sugar, the growth rate would be around 2.3% as forecasted in June 2009.
3. The main assumptions used for the forecast are:
(i) Sugarcane/sugar milling: a production of 490,000 tonnes of sugar and increased exports of refined and special sugars, resulting in a growth of 18.2%, higher than the 3.7% growth in 2008 when sugar production, mainly raw, was 452,062 tonnes.
(ii) Manufacturing industries: to grow by around 0.9%, lower than 3.2% in 2008. Within the sector,
a. “Food processing” would grow by 3.0%, increased activities being expected in “Fish processing”,
b. “Textile” would contract by 4.0% due to lower demand in our main markets namely Europe, and
c. “Other manufacturing” would grow by 1.0%, lower than the 2.4% registered in 2008 as a result of expected slowdown in activities of the beverages industry.
Within the manufacturing sector, Export Oriented Enterprises are expected to decline by 0.8% compared to a growth of 3.6% in 2008.
(iii) Construction: to grow at a lower rate of 2.5% as opposed to 11.1% in 2008, explained by a decline in private sector projects (completion of major projects such as commercial and office buildings, new hotels and hotels renovation, and start of some new ones such as projects under the Real Estate Scheme, office buildings, hotels renovation and telecommunication infrastructure) partly offset by an increase in public sector projects (road infrastructure, hospitals, and electricity infrastructure).
(iv) Hotels and restaurants: Based on tourist arrivals for the first eight months of 2009, and measures taken by various stakeholders to mitigate the fall in tourist arrivals following economic downturn in our main markets (such as promotional campaigns, extension of “voyage sans passeport”), the sector is forecasted to decline by 8.8% compared to a growth of 2.7% in 2008. Tourist arrivals are expected to be around 835,000, lower than the 930,456 arrivals in 2008 while tourist earnings would be around R 36,000 million compared to R 41,213 million in 2008.
(v) Transport, storage and communications: to grow by 5.3%, lower than the 6.0% growth in 2008, mostly due to expected poor performance in air transport, tourism related activities and activities related to imports of goods, partly offset by better performance in the communications sector as a result of increases in ICT activities and decreases in internet tariffs.
(vi) Financial intermediation: to grow at a lower rate of 5.9% compared to 10.1% in 2008, mostly explained by lower banking activities.
(vii) Business activities: to grow by 8.0% compared to 10.8% in 2008, explained by lower activities in the global business industry as well as in property development, partly offset by increasing activities in the ICT sector.

Consumption and Saving
4. Final consumption expenditure of households and Government is expected to grow by 3.0% in 2009 compared to 6.1% in 2008. Saving rate defined as the ratio of GNS to GDP at market prices, would decrease to 12.8% from 16.7% in 2008.

Investment
5. Investment in 2009 would grow by 6.3% compared to 3.9% in 2008. Exclusive of investment in aircraft and marine vessel, the growth would be 2.2% compared to 7.5% in 2008.

6. Investment rate would reach 25.6% in 2009 compared to 24.6% in 2008. Exclusive of aircraft and marine vessel, investment rate would be 24.4%, the same as in 2008.
7. Private sector investment would decline by 2.2% compared to the high 10.0% growth in 2008, due to the completion of major projects (commercial and office buildings, new hotels and hotels renovation), partly offset by some new ones (projects under the Real Estate Scheme, office buildings, hotels renovation and telecommunication infrastructure).
8. Public sector investment would rebound by 47.5% in 2009 after a decline of 17.9% in 2008, mainly due to the implementation of public investment projects such as road infrastructure and hospitals, electricity infrastructure and acquisition of aircraft. Excluding aircraft, public sector investment would grow by 17.8% compared to 1.9% in 2008.

9. Private investment rate would decrease to 19.5% from 20.4% in 2008 while public investment rate would increase to 6.1% from 4.2%. Exclusive of aircraft and marine vessel, public investment rate would be 4.8% compared to 4.2% in 2008.

10. The share of private sector investment would decrease to 76.2% from 82.9% in 2008. That of the public sector would increase to 23.8% from 17.1%. Exclusive of aircraft and marine vessel, the share of private sector investment in 2009 would be 80.1%, lower than the 2008 figure of 82.7%; the share of the public sector would be 19.9% compared to 17.3% in 2008.