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Madagascar is the world’s fifth largest island, situated in the Indian Ocean off the coast of southern Africa. Despite considerable natural resources, however, its population of about 28 million (2020) has one of the world’s highest poverty rates.

Political Context

Andry Rajoelina was re-elected President of the Republic of Madagascar in December 2023 following the first round of presidential elections on November 16, 2023. He reappointed Christian Ntsay as Prime Minister. The new government was officially presented on January 14, 2024, and comprises 27 ministries.

Economic Situation

For decades, Madagascar has struggled with sluggish growth and persistent poverty, largely due to weak governance, inadequate human and physical capital development, and slow structural transformation. The situation is exacerbated by increasing climate crises and heightened vulnerability to external shocks. Moreover, weak economic growth combined with rapid population growth has resulted in Madagascar having one of the highest poverty rates in the world, reaching 75% in 2022 using the national poverty line.

Although economic growth decelerated from 5.7% in 2021 to 3.8% in 2022, largely due to the spillover effects of the war in Ukraine and climate shocks, it gradually recovered. Growth is expected to continue its recovery path, stabilizing at 4% in 2023, before accelerating to around 4.7% in 2024-25. Inflationary pressures have intensified, with headline inflation increasing from 6.9% in June 2022 to 11.3% in June 2023. Inflation is expected to remain at 10.5% in 2023, before moderating to around 8.5 % in 2024-25.

The current account deficit widened from 5% of GDP in 2021 to 5.6% in 2022. However, a decline in global oil prices is projected to contribute to a further narrowing of the current account deficit to 4.5% of GDP in 2023-25, as the decline in imports outpaces the slowdown in exports. The rebound in exports may face challenges, however, as restrictive import policies−such as the lowering of permissible nicotine levels in imported food products−from Madagascar's main vanilla trading partners are likely to hinder progress.

The overall fiscal deficit widened from 2.8% of GDP in 2021 to 6.4% in 2022, and total public debt rose to 56.9% of GDP in 2022. This deterioration in the fiscal balance is largely the result of deferred payments of oil duties by oil distributors. The settlement of these cross-liabilities is projected to narrow the budget deficit to 3.8% of GDP in 2023, as tax revenues rise to 12.8% of GDP from 9.6% in 2022. Moreover, the projected gradual increase in capital expenditure from 5.1% of GDP in 2021 to 8.7% in 2025 reflects improved budget execution and the implementation of the government's priority projects.

Last Updated: Jan 10, 2024

What's New


Madagascar: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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Additional Resources

Country Office Contacts

Main Office Contact
1 Rue Andriamifidy
BP 4140
Antananarivo 101, Madagascar
For general information and inquiries
Diana Styvanley
External Affairs Officer
For project-related issues and complaints