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Madagascar is the world’s fifth-largest island, situated in the Indian Ocean off the coast of southern Africa. The country is endowed with considerable natural resources and unparalleled biodiversity. However, its population, estimated at 30.3 million in 2023, faces the challenge of a persistently high poverty rate (80.7% in 2023, $2.15 per person per day).

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. Legislative elections are scheduled on May 29, 2024.

Economic Situation

Economic growth is estimated at 3.8% in 2023, driven by tourism, with arrivals nearly doubling from 2022 and high demand for telecommunications and the food industry. Economic growth has been mainly driven by domestic expenditure, while the contribution to growth from net exports has been marginal compared to previous years. Although mineral export volumes (nickel, cobalt) have been moderately strong and gold export has resumed after suspension in 2020, lower demand and prices for key Malagasy exports such as textiles, vanilla, and spices have dampened overall export performance in 2023. 

Following a peak of 12.3% in March 2023, inflation has been declining since the second quarter of 2023 due to high base effects related to the fuel price hike in July 2022 and a tighter monetary policy stance. The central bank increased its deposit and marginal lending facility rates twice since early 2023 for a cumulative increase of 90 basis points. The fiscal deficit is estimated to have declined from 6.4% of GDP in 2022 to 4.9% in 2023, thanks to an estimated increase in the tax-to-GDP ratio following a one-off impact related to the recovery of petroleum tax arrears accumulated in 2022. Nonetheless, the tax-to-GDP ratio remained below the 12.9% budget target. Government expenditure has increased and included a large transfer to the public water and electricity utility, JIRAMA. The budget deficit was mainly financed by concessional external financing. External and overall public debt distress risks remain moderate.

Growth is expected to accelerate to an average of 4.6% over 2024-26, driven by favorable base effects, enhanced trade and tourism opportunities, and a new impetus for private investment following impactful structural reforms in pivotal sectors such as mining, telecommunications and digital technologies, and the investment climate. Nevertheless, the poverty rate is projected to stay elevated, as job creation is expected to remain limited compared to population growth. Hence, about 24.8 million people are projected to remain poor in Madagascar, a number larger than the total population of Burundi and South Soudan altogether, where the poverty rates also are very high.

Last Updated: Apr 01, 2024

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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