Madagascar flag Madagascar: Contexto político-econômico

Contexto econômico de Madagascar

Economic Indicators

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. Amid inflationary pressures associated with increased rice imports, elevated local fuel prices, and the impact of two cyclones causing supply disruptions, the country experienced an economic growth rate of 4% in 2023. In 2024, the minerals sector's development, driven by the new mining code, is anticipated to bolster growth. Public investment will bolster the construction sector through infrastructure projects, notably including the construction of a water pipeline in the south and a new motorway connecting Antananarivo and Toamasina by 2026. However, private consumption is forecasted to remain subdued in 2024. For the year as a whole, the IMF expects growth at 4.8%, followed by 4.7% in 2025.

In 2023, the budget deficit saw a slight reduction (to 5.5%, from 6% one year earlier - Coface), primarily due to higher revenues, including foreign aid and taxes, surpassing expenditures. However, increased losses incurred by the national water and electricity production and distribution company, Jirama, stemming from an accident at a hydroelectric power station in 2022, exerted pressure on the budget balance. To prevent arrears accumulation and ensure electricity supply, the government increased its transfers to Jirama. The implementation of an automatic mechanism for fuel price determination at the year's onset, coupled with reforms to Jirama, is expected to mitigate budgetary risks in 2024. Despite continued high capital spending on government infrastructure projects, revenue from the mining sector and ongoing structural reforms is projected to narrow the budget deficit. Public debt – at 54% of GDP in 2023 according to the IMF - will be maintained at a sustainable level, with the external portion constituting 40% of GDP, primarily held by multilateral institutions, and the domestic portion amounting to 15.3% of GDP, mainly held by state-owned enterprises. In 2022, inflation surged to 8.1%, propelled by increased energy and food costs. To alleviate its impact, the government implemented several measures, including capping the prices of essential goods such as rice, sugar, and cement. Additionally, government employee wages were raised by an average of 17%, and the value-added tax on fuel was reduced from 20% to 15%. Despite these efforts, inflation soared to 10.5% last year. However, it is anticipated to gradually ease over the forecast horizon, reaching 8.1% by 2025 (IMF).

The ILO estimates the unemployment rate in Madagascar in 2022 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, poverty concerns around 72.5% of the population, as the pandemic worsened the situation. Malagasy people have a low life expectancy due to poor living conditions, particularly in matters of sanitation and hygiene. In addition, the country remains extremely vulnerable to climate shocks, such as hurricanes, floods, locust infestations, and public health crises.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 15.2915.7516.4717.9219.27
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 528529538570596
General Government Gross Debt (in % of GDP) 53.456.656.155.655.9
Inflation Rate (%)
Current Account (billions USD) -0.82-0.71-0.79-0.85-0.90
Current Account (in % of GDP) -5.4-4.5-4.8-4.7-4.7

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Madagascar is the leading exporter of vanilla in the world. Agriculture, including fishing and forestry, accounts for 21.9% of GDP and employs 70% of the population according to World Bank data (even though the majority of inhabitants practice subsistence farming). The main crop is rice, grown on almost half of the agricultural land. The main other agricultural products are: coffee, sugar cane, cloves, cocoa, cassava, beans, bananas, peanuts, and livestock products. The agricultural sector is limited by low productivity due to the minimal use of modern agricultural techniques, the lack of infrastructure, and great vulnerability to climatic fluctuations, but benefits from numerous ongoing investments aimed at meeting these challenges. Deforestation and erosion, compounded by excessive use of firewood, are of serious concern. The paddy rice harvest is expected to reach 5.8 million tonnes at the end of the 2023/2024 rice-growing season, according to data from the Ministry of Agriculture and Livestock. If this forecast materializes, it would represent a 10.53% increase compared to the stock produced a year earlier, confirming the positive momentum of the sector.

The industrial sector contributes 21.7% of GDP and employs 10% of the active population (World Bank). It is dominated by mining (precious stones including rubies, sapphires, emeralds, etc.), textiles, and agro-industry. Other business sectors include soap making, glassware, cement, automotive assembly, paper, and petroleum. The manufacturing sector is rather limited, accounting for only 9% of GDP. The development of the industrial sector is primarily hindered by the lack of infrastructure renovation and the absence of a stable and profitable energy supply for businesses. The Malagasy textile industry is currently under the influence of Mauritius, a historical operator in the clothing sector, which has relocated much of its production to Madagascar to cope with rising production costs in its own country.

The tertiary sector contributes to 47.1% of GDP and employs 20% of the active population. Trade performed well before the global economic slowdown (with growth of around 5% per year), as well as tourism, which is one of the main assets of the country and whose potential is still untapped. According to figures provided by the Ministry of Tourism, Madagascar has welcomed more than 157,000 tourists during the first nine months of 2023.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 73.9 10.4 15.7
Value Added (in % of GDP) 22.4 22.4 48.0
Value Added (Annual % Change) 0.9 7.4 -4.8

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.

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Sources of General Economic Information

Ministry of Economy and Finance
Ministry of Agriculture and Livestock
Ministry of Industrialisation, Commerce and Consumption
Statistical Office
National Institute of Statistics
Central Bank
Central Bank of Madagascar
Stock Exchange
Mex Madagascar
Economic Portals
Madagascar Tribune
La Verité
L'Écho du Sud
Midi Madagasikara

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