Effect of Brexit Referendum: The case of Mauritius-UK Trade

Mauritius - 14 April 2020

Trade topics: Trade Modelling

For years, the United Kingdom (UK) has been one of the top export destinations for Mauritius. The Brexit referendum, held in June 2016, not only affected the UK economy but also resulted in several economic repercussions worldwide, including Mauritius. To this end, this article aims at investigating the impact of the Brexit referendum on the Mauritius-UK trade sector. In particular, we examine its potential impact on the Mauritius-UK export market during the post-Brexit referendum period (2016Q3-2019Q4) using the recently developed Bayesian structural time-series models. The results show that Mauritius-UK export market was indeed negatively impacted by the Brexit referendum. Nevertheless, this was not due to the fluctuations in the bilateral exchange rate (Rs/GBP). Our findings suggest reinforcing existing trade policies and closely monitor the new bilateral trade agreement with the UK.

Author(s): Z Khan Jaffur & B Seetanah