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By Jean Paul Arouff
PORT LOUIS, May 5 (Reuters) - Mauritius' central bank held its repo rate at 4.0 percent on Friday and stuck to its 2017 growth forecast, but Governor Ramesh Basant Roi said the government must push ahead with infrastructure projects to ensure the island does not underperform economically.
Roi told a news conference that the bank projects headline inflation at around 2.0 percent in 2017, barring any shocks, down from a previous forecast of 2.5 percent.
Mauritius' inflation remained unchanged at 1.3 percent in the year to March, from the previous period.
While Roi reiterated the bank's economic growth forecast of 3.8 percent to 4.0 percent this year, he warned that there was a downside risk.
"Government should speed up the implementation of infrastructure projects otherwise the growth rate would be below 3.8 percent this year," Roi said.
The Indian Ocean island nation is trying to diversify its economy away from sugar, textiles and tourism into offshore banking, business outsourcing, luxury real estate and medical tourism.
For details on the bank's rate decision, click here (Reporting by Jean Paul Arouff; Writing by George Obulutsa; Editing by Hugh Lawson)