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Madagascar economic update

Madagascar Economic Update

Jacques Morisset's picture

In Madagascar, donors have traditionally counted for almost half of the Government’s budget and have been, by far, the main source of funding in social sectors. 

Since the beginning of the crisis, official aid toward education, health and social protection surged, reaching almost US$260 million in 2010 against US$180 million in 2008.  Nonetheless, this increase failed  to improve significantly social indicators. 

Why has the Malagasy economy not yet collapsed?

Jacques Morisset's picture

After almost one and half year of political instability, the economy is hurt but not dead. 

The formal private sector has revealed timid signs of recovery (far from pre-crisis levels) and the informal sector has been vibrant as the result of the good performance of the primary sector (mostly due to exceptional weather) and rising trade activities in urban centers. 

To see the full update on the Madagascar economy click here

Madagascar - What's Going On?

Jacques Morisset's picture

After one year (still counting) of political crisis, uncertainty remains the key word in Madagascar.

Private activities have rebounded compared to the first quarter 2009 but remain below pre-crisis levels. Fiscal policy, globally cautious, went through several “stop and go” episodes, sending mixed messages to financial markets, especially visible through the recent variations in the exchange and interest rates.

This uncertainty is exacerbated by the lack of consistency in policy decisions.

Somber Prospects for Madagascar’s Economy

Noro Andriamihaja's picture

Madagascar’s economy has been in recession since the beginning of the political crisis in March 2009, and prospects for 2010 don’t look too promising.  The prudent fiscal policy adopted by the Government will be increasingly difficult to sustain in 2010. Key financial indicators continue to be vulnerable to policy shifts and shocks, and export competitiveness losses have begun to create pressures on the balance of payments.  All in all, a major turnaround in the downward trend of economic activities is unlikely to occur in 2010.

See an assessment of the Madagascar economy here.