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Madagascar Economy Profile

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Economy - overview

Madagascar is a mostly unregulated economy with many untapped natural resources, but no capital markets, a weak judicial system, poorly enforced contracts, and rampant government corruption. The country faces challenges to improve education, healthcare, and the environment to boost long-term economic growth. Agriculture, including fishing and forestry, is a mainstay of the economy, accounting for more than one-fourth of GDP and employing roughly 80% of the population. Deforestation and erosion, aggravated by bushfires, slash-and-burn clearing techniques, and the use of firewood as the primary source of fuel, are serious concerns to the agriculture dependent economy.

After discarding socialist economic policies in the mid-1990s, Madagascar followed a World Bank- and IMF-led policy of privatization and liberalization until a 2009 coup d’état led many nations, including the United States, to suspend non-humanitarian aid until a democratically-elected president was inaugurated in 2014. The pre-coup strategy had placed the country on a slow and steady growth path from an extremely low starting point. Exports of apparel boomed after gaining duty-free access to the US market in 2000 under the African Growth and Opportunity Act (AGOA); however, Madagascar's failure to comply with the requirements of the AGOA led to the termination of the country's duty-free access in January 2010, a sharp fall in textile production, a loss of more than 100,000 jobs, and a GDP drop of nearly 11%.

Madagascar regained AGOA access in January 2015 and ensuing growth has been slow and fragile. Madagascar produces around 80% of the world’s vanilla and its reliance on this commodity for most of its foreign exchange is a significant source of vulnerability. Economic reforms have been modest and the country’s financial sector remains weak, limiting the use of monetary policy to control inflation. An ongoing IMF program aims to strengthen financial and investment management capacity.

GDP (purchasing power parity)$44.419 billion (2019 est.)

$42.363 billion (2018 est.)

$40.514 billion (2017 est.)

note: data are in 2010 dollars
GDP (official exchange rate)$13.964 billion (2019 est.)
GDP - real growth rate4.2% (2017 est.)

4.2% (2016 est.)

3.1% (2015 est.)
GDP - per capita (PPP)$1,647 (2019 est.)

$1,613 (2018 est.)

$1,584 (2017 est.)

note: data are in 2010 dollars
Gross national saving18.2% of GDP (2018 est.)

15.1% of GDP (2017 est.)

11.2% of GDP (2015 est.)
GDP - composition, by end usehousehold consumption: 67.1% (2017 est.)

government consumption: 11.2% (2017 est.)

investment in fixed capital: 15.1% (2017 est.)

investment in inventories: 8.8% (2017 est.)

exports of goods and services: 31.5% (2017 est.)

imports of goods and services: -33.7% (2017 est.)
GDP - composition by sectoragriculture: 24% (2017 est.)

industry: 19.5% (2017 est.)

services: 56.4% (2017 est.)
Ease of Doing Business Index scoresOverall score: 47.7 (2020)

Starting a Business score: 88.5 (2020)

Trading score: 61 (2020)

Enforcement score: 50 (2020)
Population below poverty line70.7% (2012 est.)
Labor force13.4 million (2017 est.)
Unemployment rate1.8% (2017 est.)

1.8% (2016 est.)
Unemployment, youth ages 15-24total: 3.4%

male: 3.9%

female: 3% (2015 est.)
Household income or consumption by percentage sharelowest 10%: 2.2%

highest 10%: 34.7% (2010 est.)
Distribution of family income - Gini index42.6 (2012 est.)

42.7 (2010)
Budgetrevenues: 1.828 billion (2017 est.)

expenditures: 2.136 billion (2017 est.)
Taxes and other revenues15.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-2.7% (of GDP) (2017 est.)
Public debt36% of GDP (2017 est.)

38.4% of GDP (2016 est.)
Inflation rate (consumer prices)5.6% (2019 est.)

8.6% (2018 est.)

8.5% (2017 est.)
Agriculture - productsrice, sugar cane, cassava, sweet potatoes, milk, vegetables, bananas, mangoes/guavas, tropical fruit, potatoes
Industriesmeat processing, seafood, soap, beer, leather, sugar, textiles, glassware, cement, automobile assembly plant, paper, petroleum, tourism, mining
Industrial production growth rate5.2% (2017 est.)
Current Account Balance-$35 million (2017 est.)

$57 million (2016 est.)
Exports$5.272 billion (2019 est.)

$5.06 billion (2018 est.)

$4.839 billion (2017 est.)
Exports - commoditiesvanilla, nickel, gold, clothing and apparel, gemstones (2019)
Exports - partnersUnited States 19%, France 18%, United Arab Emirates 7%, China 6%, Japan 6%, Germany 5%, India 5% (2019)
Imports$5.855 billion (2019 est.)

$5.56 billion (2018 est.)

$5.796 billion (2017 est.)
Imports - commoditiesrefined petroleum, rice, cars, packaged medicines, clothing and apparel (2019)
Imports - partnersChina 24%, France 11%, United Arab Emirates 9%, India 7%, South Africa 5% (2019)
Reserves of foreign exchange and gold$1.6 billion (31 December 2017 est.)

$1.076 billion (31 December 2016 est.)
Debt - external$3.085 billion (2019 est.)

$4.107 billion (2018 est.)
Exchange ratesMalagasy ariary (MGA) per US dollar -

3,116.1 (2017 est.)

3,176.5 (2016 est.)

3,176.5 (2015 est.)

2,933.5 (2014 est.)

2,414.8 (2013 est.)
Fiscal yearcalendar year

Source: CIA World Factbook
This page was last updated on September 18, 2021