An International Monetary Fund (IMF) team, headed by Marshall Mills, visited Antananarivo, Madagascar, from March 2–11 to assess progress under the Staff-Monitored Program (SMP)[1] with Madagascar.
At the end of the mission, Mr. Mills issued the following statement: “The Malagasy authorities and IMF staff see the staff-monitored program (SMP) as a crucial tool in guiding policy and building a strong track record. Successful implementation of this program will strengthen economic stability and sustainability, provide a framework that boosts confidence and assists in catalyzing external assistance, and help lay the groundwork for a future request for an Extended Credit Facility (ECF) arrangement.
“Economic and financial conditions are improving. Growth is expected to accelerate from last year to more than 4 percent this year. Economic activity will be driven by a recovery in tourism, which was affected by Air Madagascar’s operational problems in 2015; strengthening construction activity led by public investment; and restored AGOA (African Growth and Opportunity Act) eligibility benefiting manufacturing. With better rainfall for most of the country so far this year, agricultural production is also expected to recover slowly in 2016 after contracting in 2015. Inflation remains contained below at 8 percent.
The external environment is challenging, in light of low commodity prices and slow growth in some export markets. Risks to the outlook stem mainly from fiscal challenges, weak global commodity prices, adverse weather conditions, and policy implementation in a difficult political environment.
