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Madagascar Economy Profile 2018

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Economy - overviewMadagascar 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 the onset of a political crisis, which lasted from 2009 to 2013. The 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 in 2000; however, Madagascar's failure to comply with the requirements of the African Growth and Opportunity Act (AGOA) led to the termination of the country's duty-free access in January 2010, a sharp fall in textile production, and a loss of more than 100,000 jobs.

Madagascar regained AGOA access in January 2015 following the democratic election of a new president the previous year. Madagascar produces around 80% of the world’s vanilla supply; although supply was constrained by hurricane-related damage in 2017, international demand drove prices to record highs, increasing export earnings for Malagasy vanilla. Madagascar’s financial sector remains weak, limiting the use of monetary policy to control inflation, but an ongoing IMF program aims to strengthen financial and investment management capacity.
GDP (purchasing power parity)$39.81 billion (2017 est.)
$38.15 billion (2016 est.)
$36.62 billion (2015 est.)
note: data are in 2017 dollars
GDP (official exchange rate)$10.56 billion (2016 est.)
GDP - real growth rate4.3% (2017 est.)
4.2% (2016 est.)
3.1% (2015 est.)
GDP - per capita (PPP)$1,600 (2017 est.)
$1,500 (2016 est.)
$1,500 (2015 est.)
note: data are in 2017 dollars
Gross national saving14.5% of GDP (2017 est.)
16% of GDP (2016 est.)
11.2% of GDP (2015 est.)
GDP - composition, by end usehousehold consumption: 75.4%
government consumption: 12%
investment in fixed capital: 16.6%
investment in inventories: 0%
exports of goods and services: 32.1%
imports of goods and services: -36.1% (2017 est.)
GDP - composition by sectoragriculture: 23.7%
industry: 16%
services: 60.3% (2017 est.)
Population below poverty line70.7% (2012 est.)
Labor force13.4 million (2017 est.)
Unemployment rate2.1% (2016 est.)
Unemployment, youth ages 15-24total: 2.6%
male: 2.2%
female: 3% (2012 est.)
Household income or consumption by percentage sharelowest 10%: 2.2%
highest 10%: 34.7% (2010 est.)
Distribution of family income - Gini index41 (2012)
46.9 (2001)
Budgetrevenues: $1.292 billion
expenditures: $1.725 billion (2017 est.)
Taxes and other revenues12.2% of GDP (2017 est.)
Budget surplus (+) or deficit (-)-4.1% of GDP (2017 est.)
Public debt42.3% of GDP (2016 est.)
35.5% of GDP (2015 est.)
Inflation rate (consumer prices)7.8% (2017 est.)
6.7% (2016 est.)
Central bank discount rate8.3% (31 December 2016)
8.7% (31 December 2015)
Commercial bank prime lending rate64% (31 December 2017 est.)
62% (31 December 2016 est.)
Stock of narrow money$1.006 billion (31 December 2017 est.)
$849.1 million (31 December 2016 est.)
Stock of broad money$2.015 billion (31 December 2017 est.)
$1.793 billion (31 December 2016 est.)
Stock of domestic credit$1.957 billion (31 December 2017 est.)
$1.746 billion (31 December 2016 est.)
Market value of publicly traded shares$NA
Agriculture - productscoffee, vanilla, sugarcane, cloves, cocoa, rice, cassava (manioc, tapioca), beans, bananas, peanuts; livestock products
Industriesmeat processing, seafood, soap, beer, leather, sugar, textiles, glassware, cement, automobile assembly plant, paper, petroleum, tourism, mining
Industrial production growth rate4.8% (2017 est.)
Current Account Balance-$494 million (2017 est.)
$75 million (2016 est.)
Exports$2.35 billion (2017 est.)
$2.196 billion (2016 est.)
Exports - commoditiescoffee, vanilla, shellfish, sugar, cotton cloth, clothing, chromite, petroleum products
Exports - partnersFrance 23.5%, US 12.8%, Germany 8.3%, China 6.3%, Japan 5%, Netherlands 4.3%, South Korea 4.2% (2016)
Imports$3.235 billion (2017 est.)
$2.857 billion (2016 est.)
Imports - commoditiescapital goods, petroleum, consumer goods, food
Imports - partnersChina 21.2%, France 6.9%, India 6.5%, UAE 5.6%, Saudi Arabia 5%, South Africa 5% (2016)
Reserves of foreign exchange and gold$1.141 billion (31 December 2017 est.)
$1.184 billion (31 December 2016 est.)
Debt - external$3.914 billion (31 December 2017 est.)
$3.425 billion (31 December 2016 est.)
Stock of direct foreign investment - at home$6.461 billion (2014 est.)
$6.462 billion (2013 est.)
Stock of direct foreign investment - abroad$NA
Exchange ratesMalagasy ariary (MGA) per US dollar -
3,262.7 (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 January 20, 2018