Madagascar flag Madagascar: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Despite being rich in natural resources, Madagascar is among the poorest countries in the world. Political instability, weak institutions and poor governance have been impediments to the country's economic growth. Economic activity, which displayed a certain dynamism until 2019, contracted by an estimated -6.1% in 2020 due to the outbreak of the COVID-19 (IMF). Economic activity gradually recovered in 2021, with GDP growth reaching an estimated 2.9%, supported by the mining, textile, and service sectors (IMF). Growth is expected to further strengthen to 4.8% in 2022 and 5.1% in 2023 (IMF). Risk factors that can affect growth include social fragility, fiscal imbalances and vulnerability to external shocks.

The economy of Madagascar was severely impacted by the COVID-19 pandemic, due to the fall of tourism activities, exports and lower domestic demand. As tax revenues decreased sharply, the fiscal situation deteriorated, the domestic primary balance turning from a small surplus to a deficit. In 2021, the economy started to recover, but public finances continued to deteriorate. Public deficit reached 6.6% GDP in 2021 and is forecast to amount to 6.1% GDP in 2022 according to the 2022 budget. Public debt (almost exclusively concessional) increased from 46% GDP in 2020 to 48.8% GDP in 2021, but remains sustainable. It is expected to further increase to 49.3% GDP in 2022 and 49.4% GDP in 2023 (IMF). Mainly driven by food products and imports, inflation increased from 4.2% in 2020 to 6% in 2021, and is expected to reach 6.4% in 2022 and 6.2% in 2023 (IMF). The IMF called for prompt policy action to support the poor. In March 2021, the IMF and Malagasy authorities agreed on a medium-term program of about USD 320 million under the Extended Credit Facility (ECF). This program aims at supporting recovery, preserving macroeconomic stability, rebuilding fiscal space and advancing reforms. The authorities are also committed to pursue the delayed Madagascar Emergence Plan 2019/2023, that aims to stimulate the country's economic growth through an increase in public and private investments, the strengthening of human capital and the improvement of governance. Among the country's persistent socio-economic challenges are poverty, corruption and the infrastructure deficit.

The ILO estimates the unemployment rate in Madagascar in 2020 at 1.9% of the total active population, but Madagascar’s living conditions remain among the lowest in the world. According to the World Bank, extreme poverty concerned almost three quarters of the population in 2019, and the pandemic worsened the situation. The ongoing famine in the South of the country is a major concern. Malagasy people have a low life expectancy due to poor living conditions, particularly in matters of sanitation and hygiene. According to WaterAid Madagascar, around 70% of the population does not have access to adequate sanitation and 89% of Malagasy people do not have access to improved toilets. As a result, there is a high risk of the spread of major infectious diseases among the population. More than half of the country's children suffer from a serious form of malnutrition. In addition, the country remains extremely vulnerable to climate shocks, such as hurricanes, floods, locust infestations and public health crises. The south of the country faces security concerns due to armed robbery of livestock.

Main Indicators 20202021202220232024
GDP (billions USD) 13.0614.2815.1116.0617.18
GDP (Constant Prices, Annual % Change) -
GDP per Capita (USD) 478507522540562
General Government Gross Debt (in % of GDP) 50.853.153.853.153.6
Inflation Rate (%)
Current Account (billions USD) -0.70-0.70-0.82-0.82-0.87
Current Account (in % of GDP) -5.4-4.9-5.4-5.1-5.1

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

Monetary Indicators 20162017201820192020
Malagasy Ariary (MGA) - Average Annual Exchange Rate For 1 GHS 796.13716.24727.27695.83676.90

Source: World Bank, 2015


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Latest Update: March 2023