Press Release: Statement by an IMF Staff Mission at the Conclusion of the 2005 Article IV Consultation Discussions with Madagascar

April 11, 2005

Statement by an IMF Staff Mission at the Conclusion of the 2005 Article IV Consultation Discussions with Madagascar

The following statement was issued earlier today in Antananarivo by an International Monetary Fund (IMF) staff mission:

"A staff team from the International Monetary Fund, led by Mr. Ambroise Fayolle, visited Madagascar during March 21-April 1, 2005, to conduct the discussions for the 2005 Article IV consultation. The team met with President Marc Ravalomanana, Prime Minister Jacques Sylla, Minister of Economy and Finance Benjamin Radavidson, Governor Gaston Ravelojaona and other senior officials of the government, members of the Senate and the private sector, non-governmental organizations, and donors to exchange views on recent economic developments and prospects for the Malagasy economy and discuss the ongoing cooperation between the IMF and Madagascar.

"The IMF team welcomed the continued solid growth of Madagascar's economy in spite of adverse shocks that affected the economy in 2003-04 and the substantial increases in the price of its main staple food, rice, and of oil. After the sharp depreciation of the currency in the first half of 2004, the foreign exchange market has been relatively stable. However, high inflation remains a strong concern and calls for continued implementation of tight budgetary and monetary policies throughout 2005. External cost and price competitiveness has improved, however, reflecting the large depreciation in the nominal exchange rate since the beginning of 2004.

"Implementation of structural reforms has been somewhat slower than envisaged earlier by the government. However, some progress was achieved in the fight against corruption, notably with the establishment of an anti-corruption bureau. In the discussions with the Malagasy authorities, the IMF team stressed the importance of strengthening fiscal revenue collection, enhancing public expenditure management, improving monetary policy implementation, and accelerating structural reforms. It would also be critical to preserve Madagascar's competitiveness and promote export diversification, particularly in light of the liberalization of the world markets for textiles.

"The IMF Executive Board is scheduled to discuss the 2005 Article IV consultations in the next couple of months, together with an assessment of the Fund's engagement with Madagascar over the last 15 years. This discussion will also give the Board an opportunity to discuss future relationships between the IMF and Madagascar, including the case for further financial arrangements."


Public Affairs    Media Relations
E-mail: E-mail:
Fax: 202-623-6278 Phone: 202-623-7100