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Overview

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 (75% in 2022, using the national poverty line of about 4,000 ariary per person per day).

Political Context
Andry Rajoelina was re-elected President of Madagascar in December 2023 after winning the first round of elections on November 16, 2023. He reappointed Christian Ntsay as Prime Minister. In the legislative elections held on May 29, 2024, the presidential party secured an absolute majority in the National Assembly, with 84 out of 163 deputies belonging to the presidential platform. A new cabinet was then formed, comprising 27 ministers and two secretaries of state including 12 women. In the communal and municipal elections held on December 11, 2024, the presidential coalition dominated, winning over 960 out of 1,695 mayoral seats nationwide.

Economic Situation
Economic growth is estimated to have remained stable at 4.2% in 2024, though this rate is insufficient to significantly improve living standards. The service sector, particularly tourism and telecommunications, has been the primary driver of growth, including through increased international air traffic, new airlines, and a new telecom licensing regime. On the demand side, private investment surged in 2024, propelled by the liberalization of the telecommunications sector and broader business climate reforms.

Looking forward, growth is projected to average 4.7% from 2025 to 2027, with industrial production (including textiles and mining) and services expected to lead the expansion. The tourism sector is anticipated to maintain its growth momentum, driven by rising international travel and Madagascar's efforts to establish itself as a key tourism destination. This projection assumes the continuation of structural reforms aimed at enhancing market competitiveness in critical sectors and improving the investment climate. However, the country faces significant challenges, including frequent power outages and climate change-related risks that can potentially disrupt manufacturing and agricultural productivity.

Despite positive growth projections, Madagascar continues to grapple with economic challenges. High population growth (over 2.4% annually) and persistent inflation (averaging 7.6% in 2024) limit the potential for substantial improvements in living standards. The current account deficit worsened to an estimated 5% of GDP in 2024, primarily due to declining exports of key commodities like vanilla, cloves, cobalt, and nickel. While the fiscal deficit has been gradually narrowing and is projected to decrease to around 3.8% of GDP by 2027, the country's economic resilience depends on maintaining reform momentum, diversifying exports, and addressing infrastructure constraints.

Last Updated: Apr 01, 2025

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Country Office Contacts

Main Office Contact
1 Rue Andriamifidy
BP 4140
Antananarivo 101, Madagascar
+261-20-22-560-00
For general information and inquiries
Diana Styvanley
External Affairs Officer
+261-20-22-560-00
For project-related issues and complaints