Madagascar’s economy stabilizes amid ongoing inflation

Accelerating investment projects is crucial for stimulating growth in response to declining economic activity. According to IMF projections, Madagascar’s growth rate is expected to reach 4.2 % in 2024, increasing to 4.6 % in 2025.

The Malagasy economy has shown stability despite ongoing inflationary pressures. According to a recent IMF report, a strong rice harvest and a resurgence in graphite extraction in 2023 have contributed to economic resilience into early 2024.

Central Bank Governor Aivo Andrianarivelo emphasized the need to streamline the payment process for public sector providers. When businesses struggle, economic activity contracts and investments are key to reversing this trend. The government has a vision and a multitude of projects, but implementation may lag behind schedule. Accelerating these projects, which are already allocated in the national budget, is essential to avoid delays in meeting these objectives.

Inflation remains a challenge, despite a variable but generally stable Ariary compared to international currencies. As of March 2024, the inflation rate stood at around 7.2 %, rising to 7.8 % by August. Due to rising energy costs, the IMF also noted that deteriorating road infrastructure is further driving up transportation and production expenses.