After three consecutive months of slowing price growth, Mauritius inflation has picked up again. The annual inflation rate rose to 4.3% in May 2026 — the highest since December 2025 — up from 3.6% in April and a one-year low of 2.7% in March.
What Is Driving the Rebound?
The sharpest pressures are coming from services and energy-linked categories. Restaurants and hotels rose 11.5% year-on-year in May, transportation jumped 9.6%, and housing and utilities surged 8.1% — a significant acceleration from 3.9% the previous month.
Alcoholic beverages and tobacco remain elevated at 9.3%. Food and non-alcoholic beverages continued to fall, down 2% year-on-year, providing some relief for household budgets.
On a monthly basis, the CPI rose 0.8% in May, following a 1.3% jump in April — the sharpest monthly increase since January 2025.
The Bigger Picture
The headline inflation rate for the twelve months ending March 2026 was 4.2%, compared to 2.5% for the same period ending March 2025. This reflects a structural pickup in services inflation even as food deflation provides an offset.
What This Means for Policy
The Bank of Mauritius has maintained its Key Rate at 4.50%. With inflation now re-accelerating above 4%, the MPC will face a difficult balancing act at its next meeting. Cutting rates risks fuelling further price pressure; holding them steady may weigh on credit growth and private investment.
What It Means for Households and Businesses
For consumers, the pain is concentrated in transport and hospitality — sectors that affect both daily commuting costs and the tourism-linked economy. For businesses, rising utilities costs are squeezing margins, particularly in manufacturing and hospitality.
Finance professionals should watch the June CPI release closely. If transport and housing costs remain elevated heading into Q3, expectations for a rate cut in 2026 will likely be pushed out to early 2027.