Fact check: will the deficit really fall to 3.7% of GDP this year?
The Budget promises a deficit of 3.7% of GDP in 2026-27, down from 6.0%. The target rests on Rs 10.6bn of Chagos money that has not arrived, and last year's target was missed by more than a point.
In short
What was said: the deficit will fall from 6.0% of GDP in 2025-26 to 3.7% in 2026-27 (Rs 31.2bn).
The arithmetic is right: Rs 266.7bn of spending minus Rs 235.5bn of revenue is Rs 31.2bn.
But: revenue includes Rs 10.6bn of Chagos receipts (budget item 1415). The treaty was not in force in October 2026. Without that money, the deficit would be about 4.95% of GDP (EY).
Track record: the 2025-26 target was 4.9%; the outcome was 6.0%, also because Chagos money did not arrive and growth was weaker.
New costs: dropping the pension means test adds about Rs 6.2bn, and the Bank of Mauritius expects growth of 2.8%, below the Budget's 3.5%.
Verdict: too early to tell. The target is achievable only if the Chagos money comes in and the pension gap is filled.
The claim
Presenting the 2026-27 Budget on 19 June 2026, the Prime Minister and Minister of Finance projected revenue of Rs 235.5bn and spending of Rs 266.7bn, a deficit of Rs 31.2bn, or 3.7% of GDP, falling further to 3.0% in 2027-28. In the same speech he said the delay in the UK's ratification of the Chagos treaty had deprived Mauritius of about Rs 10bn.
What the numbers show
The calculation itself is correct. The question is the assumptions behind it. Revenue is planned to rise 16% in one year. Part of that comes from higher taxes that have been legislated (corporate tax, excise, the new 35% income-tax band). But “other revenue” almost triples to Rs 19bn because property income rises from Rs 3bn to Rs 15bn: this is where the Rs 10.6bn of Chagos receipts sits.
The Chagos treaty signed in May 2025 has not entered into force: the UK let its implementing bill lapse in April 2026, and talks were continuing in October. EY calculated that without the Chagos money the deficit would be 4.95% of GDP.
What has changed since June
Two things have moved against the target. The pension means test, the reform's main short-term saving, was dropped: the Prime Minister put the cost at Rs 6.2bn for January to June 2027 and listed ways to compensate without detailing amounts. And growth: the Budget assumes 3.5%, while the Bank of Mauritius forecasts 2.8% for 2026; slower growth means lower tax receipts.
The verdict
Too early to tell. The 3.7% figure is arithmetically correct and some of the revenue measures behind it are real. But it depends on money that has not arrived, the same assumption that failed last year, and new costs have appeared since. A deficit closer to 5% is a realistic risk unless the Chagos receipts come in or spending is cut. We will update this check with the mid-year figures.