The grey list and an offshore finance hub

Mauritius built its modern economy on sugar, textiles, tourism and, from the 1990s, offshore financial services, with the Bank of Mauritius floating the rupee after lifting exchange controls in 1994 and the country becoming a conduit for investment into India and Africa. In February 2020 the Financial Action Task Force added Mauritius to its list of jurisdictions under increased monitoring for deficiencies in fighting money laundering, and the European Union also listed it as a high-risk country. The Bank of Mauritius and the government introduced legal and supervisory reforms, and Mauritius was removed from the grey list in October 2021. The pandemic, which stopped tourism, caused a contraction of about 15 percent in 2020, followed by a rebound, so Mauritius' output series in these years reflects both the health shock and the reputational shock to financial services.