In more than 90 countries

Economic Overview

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. After the recession induced by the COVID-19 pandemic in 2020, economic growth rebounded to 4.3% in 2021 and 4.2% in 2022 (IMF). According to IMF forecast, GDP growth is projected to further accelerate to 5.2% in 2023 and 2024, driven by high prices for nickel, cobalt, cloves and vanilla, consumption and increased capital spending (Coface). Risk factors that can affect growth include social fragility, fiscal imbalances and vulnerability to external shocks.

After experiencing one of the worst recessions in its history due to the Covid-19 pandemic, Madagascar’s economy recovered slowly in 2021-22. The country’s fragility was aggravated by multiple climate shocks (several storms and a drought) as well as by the inflationary pressures linked to the war in Ukraine. The latter lead to an increase in the import bill, a delayed recovery of the tourism sector and a reduced demand for exports (Coface). Inflation soared from 5.8% in 2021 to 9.8% in 2022, and it is expected to remain high in 2023 (8%) and 2024 (7.5%) (IMF). The central bank raised its key rate several times, and the government decided to cap prices on certain essential goods (rice, sugar, flour) (Coface). Fiscal deficit deteriorated from -2.9% GDP in 2021 to -6.5% GDP in 2022, and it is expected to remain high despite decreasing to -4.8% GDP in 2023 and -4.7% GDP in 2024 (IMF). Public debt slightly increased from 53.1% GDP in 2021 to 53.8% GDP in 2022, and while remaining high, it is expected to stay stable at 53.1% GDP in 2023 and 53.6% GDP in 2024 (IMF). As it is almost exclusively concessional, it is considered sustainable. 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 overall program performance is mixed, as reforms remain hampered by limited capacity and weak governance (IMF). The 2023 budget envisages gradual fiscal consolidation. 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 2021 at 2.3% of the total active population, but Madagascar’s living conditions remain among the lowest in the world. According to the World Bank, poverty concern more than 80% of the population, as 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 around 90% 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 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 13.0514.5615.2315.9717.14
GDP (Constant Prices, Annual % Change) -
GDP per Capita (USD) 477517526536560
General Government Gross Debt (in % of GDP) 51.252.357.053.152.0
Inflation Rate (%)
Current Account (billions USD) -0.70-0.73-0.85-0.91-0.88
Current Account (in % of GDP) -5.4-5.0-5.6-5.7-5.1

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.



Main Sectors of Industry

Madagascar is the leading exporter of vanilla in the world. Agriculture, including fishing and forestry, accounts for 24.7% of GDP and employs 64% 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 a 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 industrial sector contributes 19.5% of GDP and employs 9% 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 tertiary sector contributes to 50.4% of the GDP and employs 27% 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.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 64.1 8.7 27.1
Value Added (in % of GDP) 24.7 19.5 50.4
Value Added (Annual % Change) -1.4 -21.6 -4.8

Source: World Bank - Latest available data.

Monetary Indicators 20162017201820192020
Malagasy Ariary (MGA) - Average Annual Exchange Rate For 1 USD 3,176.543,116.113,334.753,618.303,787.75

Source: World Bank - Latest available data.



Foreign Trade

Foreign trade accounts for 50% of Madagascar’s GDP (World Bank), a country that collects a large share of its revenues in the form of customs duties, import taxes and VAT on imports. Madagascar is the 135th exporting economy in the world and the 134th importer (WTO). The country is a member of the WTO and COMESA (Common Market for Eastern and Southern Africa) and does not have significant non-tariff barriers. In addition, most products can be imported without an import license. The country mainly exports vanilla (22.2%), raw nickel (18.4%), clothing (9.1%), titanium ores (5%), cloves (4.2%), cobalt (3.9%), crustaceans (3.4%) and essential oils (2.8%). Its main imports are petroleum oils (13.6%), rice (6.2%), fabrics (2.7%), palm oil (2.6%), medicines (2.5%), and sugar (2%) (Comtrade, 2021).

Madagascar's main customers are France (19.2% of total exports), the United States, China, Japan, the Netherlands and Canada. Its main suppliers are China (19.4% of total imports), France, Oman, India, the United Arab Emirates, Mauritius and South Africa (Comtrade, 2021). Despite its abundant resources, Madagascar still struggles to channel its trade revenues into further development. Like other island states, Madagascar faces high transportation costs. The lack of well-developed infrastructure makes commercial transactions expensive, hindering private sector competitiveness. However, the country aims to improve logistics at the main ports and airports in order to improve trade. While the European Union is by far the largest client of Malagasy products, exports to member states of North American Free Trade Agreement have received a huge boost since 2017 following a decision by the United States to reinstate Madagascar in its trade preference programme (Africa Growth and Opportunity Act).

The country's trade balance has been traditionally negative and despite a steady increase in exports, this trend is unlikely to be reversed over the medium-term as imports continue to outpace exports. In 2021, merchandise exports amounted to USD 2.73 billion, while imports reached USD 4.41 billion. Exports of services amounted to USD 589 million, and imports reached USD 1.18 billion (WTO). In 2021, exports of goods and services increased by 11.6% compared to 2020, while imports increased by 7.3% (World Bank).

Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 3,6704,0613,9423,2244,408
Exports of Goods (million USD) 2,8483,1102,6961,9872,726
Imports of Services (million USD) 1,0891,1231,0226501,180
Exports of Services (million USD) 1,2441,3411,449626589

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 65.367.862.649.050.4
Trade Balance (million USD) -450-458-844-900-969
Trade Balance (Including Service) (million USD) -344-414-603-1,129-1,427
Imports of Goods and Services (Annual % Change) 23.711.14.6-16.67.4
Exports of Goods and Services (Annual % Change) 45.42.410.9-36.611.6
Imports of Goods and Services (in % of GDP) 34.436.334.228.929.4
Exports of Goods and Services (in % of GDP) 30.931.528.420.121.0

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change)
Volume of imports of goods and services (Annual % change) 3.815.12.59.2-1.2

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

International Economic Cooperation
Madagascar is a member of the WTO, the Common Market for Eastern and Southern Africa (COMESA), and the South African Development Community (SADC)

Main Partner Countries

Main Customers
(% of Exports)
France 19.2%
United States 18.1%
China 13.2%
Japan 8.7%
Netherlands 5.2%
See More Countries 35.4%
Main Suppliers
(% of Imports)
China 19.4%
France 10.2%
Oman 10.2%
India 8.3%
United Arab Emirates 5.9%
See More Countries 46.0%

Source: Comtrade, Latest Available Data



Political Outline

Current Political Leaders
President: Andry RAJOELINA (since 21 January 2019)
Prime Minister: Christian NTSAY (since 6 June 2018 and re-appointed 19 July 2019)
Next Election Dates
Presidential: 2023
Senate: December 2025
National Assembly: May 2024
Main Political Parties
AREMA: leader Didier RATSIRAKA
IRD: Coalition of 10 parties lead by Andry RAJOELINA
Executive Power
The President of the Republic is elected by direct universal suffrage for a 5-year term, renewable twice. He appoints the Prime Minister. He can dissolve the National Assembly, which can for its part vote a motion of censure demanding the resignation of the Prime Minister and his government.
Legislative Power
Legislative power is shared between the government and the two chambers (Senate and National Assembly). The National Assembly is made up of 160 representatives elected by direct suffrage every five years. The Senate is made up of 90 senators, two thirds of whom are elected by local legislators. The other third are appointed by the President, all for a six-year term.


COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Madagascar, please visit the Ministry of Public Health (MSANP) with the official data.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Madagascar and the current sanitary measures in vigour, please consult the official governmental portal on COVID-19 including the up-to-date information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Ministry of Economy and Finance.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Madagascar on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the information on the economic recovery scheme put in place by the Madagascan government to address the impact of the COVID19 pandemic on the Madagascan economy, please visit the website of the Madagascan Ministry of Economy and Finance.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Madagascan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Madagascar in the IMF’s Policy Tracker platform.
Support plan for businesses
For the information on the local business support scheme established by the Madagascan government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, please consult the information about COVID19 on the portal of the Ministry of Economy and Finance and the Groupement des Enterprises de Madagascar.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
To find out about the support plan for exporters put in place by the Madagascan government, please consult the Groupement des Enterprises de Madagascar website.