Mauritius’s inflation rate was little changed at 3.9 percent in June, remaining below the central bank’s target for a fourth month, the statistics agency said.
Prices increased 0.2 percent in the month because of higher bread costs, the Port Louis-based Statistics Mauritius said in a statement on its website today. Inflation was 3.8 percent in May and the average rate for the past 12 months was 5.1 percent, it said.
“We are still on the safe side,” Renganaden Padayachy, an economist at the Mauritius Chamber of Commerce and Industry, said by phone today. “The rate is below the set 4 percent to 6 percent range.”
Slowing inflation has created room for the central bank to cut its benchmark lending rate to boost the economy as a debt crisis in Europe, the Indian Ocean island nation’s main source of tourists and biggest export destination, curbs demand for products. Inflation slowed to 3.8 percent in March, the slowest pace since November 2010.
The statistics agency reduced its forecast for economic growth this year to 3.5 percent, which would be the smallest expansion in three years. The Bank of Mauritius cut its key policy rate in December and March, reducing it to 4.9 percent.
A low inflation rate “gives scope for additional measures to stimulate growth, curb unemployment, rather than focusing on price control,” Padayachy said.
The rupee weakened 0.9 percent to 31.05 against the dollar by 12:15 a.m. in Port Louis, according to data compiled by Bloomberg.
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