Press Release No. 06/214

Press Release No. 06/214

Mr. Brian Ames, the International Monetary Fund's (IMF) mission chief for Madagascar, issued the following statement today at the conclusion of discussions with Minister of Economy, Finance and Budget Benjamin Radavidson and Central Bank of Madagascar Governor Gaston Ravelojaona:

"Over the past two weeks, a visiting IMF mission reviewed performance under the authorities' economic program which is being supported by a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF).¹ The mission held very constructive discussions with President Ravalomanana, Prime Minister Sylla, Minister Radavidson, Governor Ravelojaona, and other senior officials of the Government of Madagascar. In addition, the mission met with representatives from the private sector, non-governmental organizations, labor unions, and the donor community."

"The economy has continued to perform well taking into account several adverse shocks, including the sharp rise in world oil prices over the past two years. Good economic performance reflects to an important extent generally prudent macroeconomic policies, and the authorities' fiscal and monetary program remains on track. Growth prospects for the end of the year are also as envisaged under the program, while the inflation outlook appears to be slightly better than originally projected. The mission reached understandings on a set of measures that would help ensure that the macroeconomic and fiscal program for the remainder of 2006 remains on track. It also reached understandings ad referendum on a set of policies and conditions that could underpin the 2007 economic program and Finance Law."

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¹ The PFGF is the IMF's concessional lending facility for low-income countries. PRGF loans carry an annual interest rate of 0.5 percent, and are re-payable over 10 years with a 5½-year grace period on principal payments.