Offshore finance centre Mauritius expects economic growth to return to five per cent in the next two years, according to Reuters Africa.

The news agency reported that in a speech on Wednesday the finance minister, Ramakrishna Sithanen, announced the budget deficit had not increased as much as previously expected. It was also revealed that the stimulus package introduced last December would not be withdrawn until the end of 2010.

Mr Sithanen, said: "We have reached the conclusion that it is more prudent to allow economic recovery to take hold, to be cemented and to be sustainable before moving out of the stimulus package."

Mauritius’ reliance on trade, tourism and offshore finance means it was hit particularly hard by the worldwide financial crisis.

Following the creation of the Mauritius Offshore Business Authority in 1992 the country has established itself as a worldwide centre for offshore finance. The body regulates industries such as offshore funds management, international financial services and offshore insurance.

Its popularity stems from tax advantages created by double taxation agreements, which ensure organizations and individuals do not get charged twice on income which is taxable in more than one country, including the UK.

Written by Chris Moore

Tags: offshore finance, tax advantages