{
  "title": "IMF Executive Board Completes the Second Reviews Under the Extended Credit Facility and the Resilience and Sustainability Facility Arrangements with the Republic of Madagascar",
  "publication": "IMF News, July 3, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/07/03/pr-25239-madagascar-imf-completes-2nd-rev-under-ecf-and-rsf-arrang",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed today the Second Reviews under the 36-month Extended Credit Facility (ECF) arrangement and under the 36-month Resilience and Sustainability Facility (RSF) arrangement.",
  "publishDate": "2025-07-03",
  "sections": [
    {
      "heading": "Review completion and disbursements",
      "content": "- The Executive Board completed the Second Reviews under the 36-month Extended Credit Facility (ECF) arrangement and the 36-month Resilience and Sustainability Facility (RSF) arrangement.\n- The completion allows for an immediate disbursement of SDR 77.392 million (about US$107 million).\n- Disbursements are specified as:\n  - SDR 36.66 million (about US$50 million) under the ECF arrangement.\n  - SDR 40.732 million (about US$56 million) under the RSF arrangement.\n- The authorities have consented to the publication of the Staff Report prepared for this review."
    },
    {
      "heading": "Economic context, shocks, and near-term outlook",
      "content": "- Madagascar has been hit by multiple shocks in the review period, including weather-related events and a dual external shock:\n  - Reduction in official development assistance (ODA) by about 1 percent of GDP.\n  - U.S. tariff hike of 47 percent initially.\n- These shocks risk setting Madagascar back and would take a toll on growth due to high dependence on external financial support and exposure of the vanilla sector and textile industry to the U.S. market.\n- Growth projection:\n  - Growth in 2025 is expected to be 4 percent (noted as lower-than-previously expected).\n- External position:\n  - The current account deficit widened to 5.4 percent of GDP in 2024.\n  - The current account deficit is expected to widen further to 6.1 percent of GDP in 2025, amid challenging prospects in the textile industry and the vanilla sector."
    },
    {
      "heading": "Program performance and structural actions",
      "content": "- Overall assessment: Madagascar’s performance under the ECF and RSF has been satisfactory.\n- Program performance specifics:\n  - All end-December 2024 quantitative performance criteria were met.\n  - Three out of four indicative targets for end-December 2024 were met.\n  - M3 growth was within the bands of the Monetary Policy Consultation Clause.\n  - All but one structural benchmark for the review period were met.\n- RSF-specific advances:\n  - A new forest carbon framework that promotes private sector participation in the reforestation was adopted.\n  - The National Contingency Fund for disaster risk management was operationalized.\n- Sectoral and institutional measures:\n  - Recent adoption of a recovery plan for the public utilities company (JIRAMA).\n  - Continued implementation of the automatic fuel price adjustment mechanism."
    },
    {
      "heading": "Key policy recommendations and IMF statements",
      "content": "- Fiscal and budgetary guidance:\n  - Reprioritize spending and undertake deliberate contingency planning in budget execution in light of recent weather-related and external shocks.\n  - Early preparations for the 2026 budget to build stronger domestic stakeholder buy-in.\n  - Anchor the budget in a well-articulated medium-term fiscal strategy that accounts for JIRAMA’s recovery plan and creates space for critical development spending.\n  - Press ahead with domestic revenue mobilization efforts and enhance public financial management and the public investment process to support fiscal sustainability.\n- Monetary and exchange rate policy:\n  - The central bank (BFM) should not loosen monetary policy until inflation is on a firm downward path.\n  - Further improvements in liquidity management, forecasting and communication to strengthen implementation of BFM’s interest-based monetary policy framework.\n  - Maintain a flexible exchange rate to help absorb external shocks and let the exchange rate act as a shock absorber.\n- Governance and anti-corruption:\n  - Swift implementation of the authorities’ anti-corruption strategy (2025-2030).\n  - Develop a homegrown action plan for implementing key recommendations from the IMF Governance Diagnostic Assessment (GDA).\n  - These steps aim to improve transparency, the rule of law, support the fight against corruption and protect the public purse.\n- Energy and social protection:\n  - Swift implementation of JIRAMA’s recovery plan to address electricity disruptions and limit fiscal pressures.\n  - Continued implementation of the automatic fuel pricing mechanism to contain fiscal risks, coupled with targeted measures to support the most vulnerable.\n- RSF commitment:\n  - Continued commitment to the RSF reform agenda to support climate adaptation and complement the ECF in fostering overall socio-economic resilience."
    },
    {
      "heading": "Selected economic indicators (as reported)",
      "content": "- National Account and Prices\n  - GDP at constant prices: 4.2 (2022), 4.0 (2023)\n  - GDP deflator: 9.6 (2022), 7.5 (2023), 7.6 (2024), 8.3 (2025), 7.0 (2026)\n  - Consumer prices (end of period): 10.8 (2022), 8.6 (2023), 7.3 (2024)\n- Money and Credit (Growth in percent of beginning-of-period money stock (M3))\n  - Broad money (M3): 13.8 (2022), 14.6 (2023), 13.7 (2024), 8.7 (2025)\n  - Net foreign assets: 0.8 (2022), 18.2 (2023), 9.8 (2024), 1.5 (2025), 1.4 (2026)\n  - Net domestic assets: 13.0 (2022), -9.7 (2023), 4.8 (2024), 12.2 (2025), 7.4 (2026)\n  - of which: Credit to the private sector: 0.7 (2022), 5.6 (2023), 6.0 (2024), 6.2 (2025)\n- Public Finance (Percent of GDP)\n  - Total revenue (excluding grants): 9.5 (2022), 11.5 (2023), 11.4 (2024), 11.2 (2025), 12.0 (2026)\n  - of which: Tax revenue: 9.2 (2022), 10.9 (2023), 10.7 (2024), 11.7 (2025)\n  - Grants: 1.3 (2022), 2.3 (2023), 0.4 (2024)\n  - Total expenditures: 16.2 (2022), 17.9 (2023), 15.7 (2024), 16.5 (2025)\n  - Current expenditure: 9.7 (2022)\n  - Capital expenditure: 5.4 (2022), 6.6 (2023)\n  - Overall balance (commitment basis): -5.5 (2022), -4.2 (2023), -2.6 (2024), -3.9 (2025), -4.1 (2026)\n  - Domestic primary balance1: -1.8 (2022), -0.3 (2023), 0.3 (2024)\n  - Primary balance: -4.9 (2022), -3.5 (2023), -1.9 (2024), -2.9 (2025), -3.0 (2026)\n  - Total financing: 4.7 (2022), 2.7 (2023), 4.3 (2024)\n  - Foreign borrowing (net): 2.4 (2022), 3.0 (2023), 2.6 (2024), 3.5 (2025), 3.7 (2026)\n  - Domestic financing: 2.2 (2022), 1.2 (2023), 0.1 (2024), 0.5 (2025)\n  - Fiscal financing need2: 0.0 (2022)\n- Savings and Investment\n  - Investment: 21.8 (2022), 19.9 (2023), 22.2 (2024), 23.1 (2025), 24.2 (2026)\n  - Gross national savings: 16.8 (2022), 15.9 (2023), 16.9 (2024), 17.0 (2025)\n- External Sector (Percent of GDP)\n  - Exports of goods, f.o.b.: 23.0 (2022), 19.5 (2023), 14.8 (2024), 13.5 (2025), 13.2 (2026)\n  - Imports of goods, c.i.f.: 33.8 (2022), 28.0 (2023), 26.4 (2024), 25.7 (2025), 25.5 (2026)\n  - Current account balance (exc. grants): -6.6 (2022), -6.3 (2023), -8.1 (2024), -6.8 (2025), -6.4 (2026)\n  - Current account balance (inc. grants): -5.4 (2022), -6.1 (2023), -6.0 (2024)\n- Public Debt (Percent of GDP)\n  - Public Debt: 50.0 (2022), 52.7 (2023), 50.3 (2024), 50.9 (2025), 52.2 (2026)\n  - External Public Debt (inc. BFM liabilities): 36.1 (2022), 37.8 (2023), 36.7 (2024), 38.5 (2025), 40.4 (2026)\n  - Domestic Public Debt: 13.9 (2022), 13.6 (2023), 12.4 (2024)\n- Reserves and income\n  - Gross official reserves (millions of SDRs): 1,601 (2022), 1,972 (2023), 2,189 (2024), 2,297 (2025), 2,337 (2026)\n  - Months of imports of goods and services: 5.7 (2022)\n  - GDP per capita (U.S. dollars): 529 (2022), 533 (2023), 569 (2024), 596 (2025), 621 (2026)\n\nIMF Press Release No. 25/239 — July 3, 2025\n\n---\n\n\n References\n\n- Republic of Madagascar and the IMF\n- IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet\n- Special Drawing Rights (SDRs) -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- PR24/232\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/07/03/pr-25239-madagascar-imf-completes-2nd-rev-under-ecf-and-rsf-arrang"
    }
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    "Published: July 3, 2025",
    "The Executive Board completed the Second Reviews under the 36-month Extended Credit Facility (ECF) arrangement and the 36-month Resilience and Sustainability Facility (RSF) arrangement.",
    "The completion allows for an immediate disbursement of SDR 77.392 million (about US$107 million).",
    "Disbursements are specified as:",
    "The authorities have consented to the publication of the Staff Report prepared for this review.",
    "Madagascar has been hit by multiple shocks in the review period, including weather-related events and a dual external shock:",
    "These shocks risk setting Madagascar back and would take a toll on growth due to high dependence on external financial support and exposure of the vanilla sector and textile industry to the U.S. market.",
    "Growth projection:",
    "External position:",
    "Overall assessment: Madagascar’s performance under the ECF and RSF has been satisfactory.",
    "Program performance specifics:",
    "RSF-specific advances:",
    "Sectoral and institutional measures:",
    "Fiscal and budgetary guidance:",
    "Monetary and exchange rate policy:",
    "Governance and anti-corruption:",
    "Energy and social protection:",
    "RSF commitment:",
    "National Account and Prices",
    "Money and Credit (Growth in percent of beginning-of-period money stock (M3))",
    "Public Finance (Percent of GDP)",
    "Savings and Investment",
    "External Sector (Percent of GDP)",
    "Public Debt (Percent of GDP)",
    "Reserves and income",
    "[Republic of Madagascar and the IMF](http://www.imf.org/external/country/MDG/index.htm)",
    "[IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries)",
    "[Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[PR24/232](https://www.imf.org/en/News/Articles/2024/06/21/pr-24232-madagascar-imf-approves-us-337-million-under-the-ecf-and-us-321-million-under-the-rsf)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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