IMF Concludes Mission on the Combined Third and Fourth Reviews of the Extended Credit Facility and the Resilience and Sustainability Facility Arrangements with Madagascar

IMF News, April 8, 2026

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Canonical URL: IMF Concludes Mission on the Combined Third and Fourth Reviews of the Extended Credit Facility and the Resilience and Sustainability Facility Arrangements with Madagascar

IMF staff mission led by Constant Lonkeng visited Antananarivo during March 26–April 8, 2026 to discuss the combined Third and Fourth Reviews of Madagascar’s program under the Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF).
The ECF and RSF arrangements were approved by the IMF Executive Board in June 2024 as a 3-year program.
Pending agreement with the authorities on the reviews and subsequent approval by the IMF Executive Board, Madagascar could receive a total disbursement of SDR 134.4 million (about $183 million).

The Malagasy economy has been hit by a myriad of domestic and external shocks—including cyclone Gezani and the war in the Middle East—which are weighing on economic activity and eroding policy buffers.
Fiscal developments:
- The fiscal deficit in 2025 was significantly lower than anticipated, driven by heightened cash pressures that prompted significant spending restraint and reorientation of investment projects by the new administration.
- Tax revenue underperformed markedly in 2025.
- The authorities are crafting a supplementary 2026 budget—reaffirming their commitment to domestic revenue mobilization and supporting economic recovery—for submission to Parliament in early May.
Policy buffers have been eroded, increasing the need for contingency planning to preserve budget credibility and external sustainability.

Fiscal and budgetary policy:
- Reaffirm commitment to domestic revenue mobilization, to be reflected in the forthcoming 2026 supplementary budget.
- Prioritize contingency planning that balances preserving budget credibility and allowing the exchange rate to act as a shock absorber for external sustainability.
- Maintain application of an automatic fuel pricing mechanism after the current pause to mitigate the fiscal impact of significantly higher global oil prices and free resources for development needs.
- Deploy well-targeted compensatory measures to protect vulnerable households from pump price hikes.
- Pursue tax expenditure rationalization.
Monetary policy:
- The central bank should maintain a tight monetary policy stance to hedge against emerging inflationary pressures.
Energy and structural policy:
- Authorities’ ambition to expand renewable energy is welcomed as a means to reduce dependence on fossil fuels.
- Advance foundational structural reforms to address state capture and combat corruption to level the playing field among economic agents and foster private sector development.
Growth and recovery strategy:
- The authorities’ economic recovery plan centers on job creation in priority sectors: energy, agroindustry, textile, tourism and ICT. Success hinges on advancing the structural reforms noted above.

Discussions will continue in the coming weeks.
Staff will prepare a report based on the mission’s preliminary findings that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

IMF Communications Department, April 8, 2026.