Madagascar: A Competitiveness and Exchange Rate Assessment

Author/Editor: Eyraud, Luc
Publication Date: May 01, 2009
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: The purpose of this paper is to assess Madagascar's competitiveness in recent years, using both price and nonprice indicators and an exchange rate assessment of the currency. We estimate the distance between the equilibrium and the actual real exchange rates using three methods: the macroeconomic balance approach, the external sustainability approach, and the reduced-form equilibrium real exchange rate approach. These methods suggest that in the medium term the real exchange rate is only slightly overvalued. We also carry out a comparative analysis of nonprice indicators and find that Madagascar performs less favorably than its competitors on structural competitiveness.
Series: Working Paper No. 09/107
Subject(s): Cross country analysis | Exchange rate assessments | Export markets | Global competitiveness | International trade | Madagascar | Price structures | Real effective exchange rates

Author's Keyword(s): Equilibrium exchange rate | competitiveness | Madagascar.
Publication Date: May 01, 2009
Format: Paper
Stock No: WPIEA2009107 Pages: 30
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