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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)
$39.85 billion (2017 est.)
$38.25 billion (2016 est.)
$36.72 billion (2015 est.)

note: data are in 2017 dollars

GDP (official exchange rate)
$11.5 billion (2017 est.)
GDP - real growth rate
4.2% (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 saving
14.8% of GDP (2017 est.)
15.4% of GDP (2016 est.)
11.2% of GDP (2015 est.)
GDP - composition, by end use
household 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 sector
agriculture: 24% (2017 est.)
industry: 19.5% (2017 est.)
services: 56.4% (2017 est.)
Population below poverty line
70.7% (2012 est.)
Labor force
13.4 million (2017 est.)
Unemployment rate
1.8% (2017 est.)
1.8% (2016 est.)
Unemployment, youth ages 15-24
total: 1%
male: 1%
female: 1% (2012 est.)
Household income or consumption by percentage share
lowest 10%: 2.2%
highest 10%: 34.7% (2010 est.)
Distribution of family income - Gini index
41 (2012)
42.7 (2010)
Budget
revenues: 1.828 billion (2017 est.)
expenditures: 2.136 billion (2017 est.)
Taxes and other revenues
15.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-2.7% (of GDP) (2017 est.)
Public debt
36% of GDP (2017 est.)
38.4% of GDP (2016 est.)
Inflation rate (consumer prices)
8.3% (2017 est.)
6.7% (2016 est.)
Central bank discount rate
9.5% (31 December 2017)
8.3% (31 December 2016)
Commercial bank prime lending rate
60% (31 December 2017 est.)
60% (31 December 2016 est.)
Stock of narrow money
$1.045 billion (31 December 2017 est.)
$849.1 million (31 December 2016 est.)
Stock of broad money
$1.045 billion (31 December 2017 est.)
$849.1 million (31 December 2016 est.)
Stock of domestic credit
$2.345 billion (31 December 2017 est.)
$1.746 billion (31 December 2016 est.)
Market value of publicly traded shares

NA

Agriculture - products
coffee, vanilla, sugarcane, cloves, cocoa, rice, cassava (manioc, tapioca), beans, bananas, peanuts; livestock products
Industries
meat processing, seafood, soap, beer, leather, sugar, textiles, glassware, cement, automobile assembly plant, paper, petroleum, tourism, mining
Industrial production growth rate
5.2% (2017 est.)
Current Account Balance
-$35 million (2017 est.)
$57 million (2016 est.)
Exports
$2.29 billion (2017 est.)
$2.26 billion (2016 est.)
Exports - commodities
coffee, vanilla, shellfish, sugar, cotton cloth, clothing, chromite, petroleum products, gems, ilmenite, cobalt, nickel
Exports - partners
France 24.8%, US 16.5%, China 6.7%, Germany 6.5%, Japan 6%, Netherlands 4.7% (2017)
Imports
$2.738 billion (2017 est.)
$2.427 billion (2016 est.)
Imports - commodities
capital goods, petroleum, consumer goods, food
Imports - partners
China 18.7%, India 9.3%, France 6.4%, South Africa 5.6%, UAE 5.3% (2017)
Reserves of foreign exchange and gold
$1.6 billion (31 December 2017 est.)
$1.076 billion (31 December 2016 est.)
Debt - external
$4.089 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 rates
Malagasy 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 year
calendar year

Source: CIA World Factbook
This page was last updated on Friday, November 27, 2020