The Mauritian four-pillar economy of sugar, textile, tourism and financial services has been increasingly tested for its resilience in recent years. While macroeconomic performance has been reasonably strong, the fragility and uncertainty of the global economic environment continues to threaten the country’s economic recovery. Anchored by a series of counter-cyclical policy measures, the country’s real gross domestic product (GDP) grew by 4.2% in 2010, up from 3.0% in 2009, driven by a recovery in tourism and a strong performance in financial services, transport and communication, and fisheries. The momentum eased in 2011 with real GDP growth estimated at having slowed to 4.1% as the euro area suffered another dramatic downturn. Prospects for a rebound in 2012 remain weak as external demand contracts, with projections showing a further decline in growth to 4.0%. Monetary policy in 2011 addressed price stability as well as risks to growth. With the headline inflation rate accelerating from 2.9% in 2010 to an estimated 6.5% in 2011, the Monetary Policy Committee raised the key repurchase agreement (repo) rate to 5.50% in the first quarter of 2011. In the fourth quarter, the key repo rate was cut to 5.40% as risks to growth outweighed inflationary pressures.