## IMF Executive Board Completes the Second Reviews Under the Extended Credit Facility and the Resilience and Sustainability Facility Arrangements with the Republic of Madagascar

_IMF News, July 3, 2025_

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## Bibliographic details
- Published: July 3, 2025

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### Review completion and disbursements
- 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:
  - SDR 36.66 million (about US$50 million) under the ECF arrangement.
  - SDR 40.732 million (about US$56 million) under the RSF arrangement.
- The authorities have consented to the publication of the Staff Report prepared for this review.

### Economic context, shocks, and near-term outlook
- Madagascar has been hit by multiple shocks in the review period, including weather-related events and a dual external shock:
  - Reduction in official development assistance (ODA) by about 1 percent of GDP.
  - U.S. tariff hike of 47 percent initially.
- 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:
  - Growth in 2025 is expected to be 4 percent (noted as lower-than-previously expected).
- External position:
  - The current account deficit widened to 5.4 percent of GDP in 2024.
  - 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.

### Program performance and structural actions
- Overall assessment: Madagascar’s performance under the ECF and RSF has been satisfactory.
- Program performance specifics:
  - All end-December 2024 quantitative performance criteria were met.
  - Three out of four indicative targets for end-December 2024 were met.
  - M3 growth was within the bands of the Monetary Policy Consultation Clause.
  - All but one structural benchmark for the review period were met.
- RSF-specific advances:
  - A new forest carbon framework that promotes private sector participation in the reforestation was adopted.
  - The National Contingency Fund for disaster risk management was operationalized.
- Sectoral and institutional measures:
  - Recent adoption of a recovery plan for the public utilities company (JIRAMA).
  - Continued implementation of the automatic fuel price adjustment mechanism.

### Key policy recommendations and IMF statements
- Fiscal and budgetary guidance:
  - Reprioritize spending and undertake deliberate contingency planning in budget execution in light of recent weather-related and external shocks.
  - Early preparations for the 2026 budget to build stronger domestic stakeholder buy-in.
  - 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.
  - Press ahead with domestic revenue mobilization efforts and enhance public financial management and the public investment process to support fiscal sustainability.
- Monetary and exchange rate policy:
  - The central bank (BFM) should not loosen monetary policy until inflation is on a firm downward path.
  - Further improvements in liquidity management, forecasting and communication to strengthen implementation of BFM’s interest-based monetary policy framework.
  - Maintain a flexible exchange rate to help absorb external shocks and let the exchange rate act as a shock absorber.
- Governance and anti-corruption:
  - Swift implementation of the authorities’ anti-corruption strategy (2025-2030).
  - Develop a homegrown action plan for implementing key recommendations from the IMF Governance Diagnostic Assessment (GDA).
  - These steps aim to improve transparency, the rule of law, support the fight against corruption and protect the public purse.
- Energy and social protection:
  - Swift implementation of JIRAMA’s recovery plan to address electricity disruptions and limit fiscal pressures.
  - Continued implementation of the automatic fuel pricing mechanism to contain fiscal risks, coupled with targeted measures to support the most vulnerable.
- RSF commitment:
  - Continued commitment to the RSF reform agenda to support climate adaptation and complement the ECF in fostering overall socio-economic resilience.

### Selected economic indicators (as reported)
- National Account and Prices
  - GDP at constant prices: 4.2 (2022), 4.0 (2023)
  - GDP deflator: 9.6 (2022), 7.5 (2023), 7.6 (2024), 8.3 (2025), 7.0 (2026)
  - Consumer prices (end of period): 10.8 (2022), 8.6 (2023), 7.3 (2024)
- Money and Credit (Growth in percent of beginning-of-period money stock (M3))
  - Broad money (M3): 13.8 (2022), 14.6 (2023), 13.7 (2024), 8.7 (2025)
  - Net foreign assets: 0.8 (2022), 18.2 (2023), 9.8 (2024), 1.5 (2025), 1.4 (2026)
  - Net domestic assets: 13.0 (2022), -9.7 (2023), 4.8 (2024), 12.2 (2025), 7.4 (2026)
  - of which: Credit to the private sector: 0.7 (2022), 5.6 (2023), 6.0 (2024), 6.2 (2025)
- Public Finance (Percent of GDP)
  - Total revenue (excluding grants): 9.5 (2022), 11.5 (2023), 11.4 (2024), 11.2 (2025), 12.0 (2026)
  - of which: Tax revenue: 9.2 (2022), 10.9 (2023), 10.7 (2024), 11.7 (2025)
  - Grants: 1.3 (2022), 2.3 (2023), 0.4 (2024)
  - Total expenditures: 16.2 (2022), 17.9 (2023), 15.7 (2024), 16.5 (2025)
  - Current expenditure: 9.7 (2022)
  - Capital expenditure: 5.4 (2022), 6.6 (2023)
  - Overall balance (commitment basis): -5.5 (2022), -4.2 (2023), -2.6 (2024), -3.9 (2025), -4.1 (2026)
  - Domestic primary balance1: -1.8 (2022), -0.3 (2023), 0.3 (2024)
  - Primary balance: -4.9 (2022), -3.5 (2023), -1.9 (2024), -2.9 (2025), -3.0 (2026)
  - Total financing: 4.7 (2022), 2.7 (2023), 4.3 (2024)
  - Foreign borrowing (net): 2.4 (2022), 3.0 (2023), 2.6 (2024), 3.5 (2025), 3.7 (2026)
  - Domestic financing: 2.2 (2022), 1.2 (2023), 0.1 (2024), 0.5 (2025)
  - Fiscal financing need2: 0.0 (2022)
- Savings and Investment
  - Investment: 21.8 (2022), 19.9 (2023), 22.2 (2024), 23.1 (2025), 24.2 (2026)
  - Gross national savings: 16.8 (2022), 15.9 (2023), 16.9 (2024), 17.0 (2025)
- External Sector (Percent of GDP)
  - Exports of goods, f.o.b.: 23.0 (2022), 19.5 (2023), 14.8 (2024), 13.5 (2025), 13.2 (2026)
  - Imports of goods, c.i.f.: 33.8 (2022), 28.0 (2023), 26.4 (2024), 25.7 (2025), 25.5 (2026)
  - Current account balance (exc. grants): -6.6 (2022), -6.3 (2023), -8.1 (2024), -6.8 (2025), -6.4 (2026)
  - Current account balance (inc. grants): -5.4 (2022), -6.1 (2023), -6.0 (2024)
- Public Debt (Percent of GDP)
  - Public Debt: 50.0 (2022), 52.7 (2023), 50.3 (2024), 50.9 (2025), 52.2 (2026)
  - External Public Debt (inc. BFM liabilities): 36.1 (2022), 37.8 (2023), 36.7 (2024), 38.5 (2025), 40.4 (2026)
  - Domestic Public Debt: 13.9 (2022), 13.6 (2023), 12.4 (2024)
- Reserves and income
  - Gross official reserves (millions of SDRs): 1,601 (2022), 1,972 (2023), 2,189 (2024), 2,297 (2025), 2,337 (2026)
  - Months of imports of goods and services: 5.7 (2022)
  - GDP per capita (U.S. dollars): 529 (2022), 533 (2023), 569 (2024), 596 (2025), 621 (2026)

*IMF Press Release No. 25/239 — July 3, 2025*

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## References

- [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)

_Source: https://www.imf.org/en/news/articles/2025/07/03/pr-25239-madagascar-imf-completes-2nd-rev-under-ecf-and-rsf-arrang_