IMF Executive Board Completes the Combined Third and Fourth Reviews Under the Extended Credit Facility and the Resilience and Sustainability Facility Arrangements with the Republic of Madagascar
IMF News, September 30, 2026
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- Published: September 30, 2026
Transaction and program status
- The IMF Executive Board completed the Combined Third and Fourth Reviews under the 36-month Extended Credit Facility (ECF) arrangement and the 36-month Resilience and Sustainability Facility (RSF) arrangement.
- Immediate disbursement authorized: SDR 114.052 million (about US$155 million), comprising:
- SDR 73.32 million (about US$100 million) under the ECF arrangement.
- SDR 40.732 million (about US$55 million).
- The ECF and RSF arrangements were approved by the IMF Executive Board in June 2024.
Economic context and outlook
- Madagascar is undergoing a political transition amid heightened vulnerability due to:
- Tropical cyclones earlier in the year.
- Spillovers from the war in the Middle East and higher global oil prices.
- Persistent electricity outages and water shortages.
- Real GDP growth:
- Estimated at 3.1 percent in 2025 (down from 4 percent at the Second Review).
- Projected at 3.8 percent in 2026, supported by post-cyclone reconstruction and the government's economic recovery plan.
- Current account balance (inc. grants):
- Projected to widen to 8.3 percent of GDP in 2026 (from 6.0 percent in 2025), reflecting higher oil prices, cyclone-related imports, and damage to mining.
Program performance and governance
- Program performance under the ECF described as broadly satisfactory.
- After a missed end-June 2025 primary balance performance criterion (QPC), authorities implemented corrective measures and met all end-December 2025 QPCs.
- M3 growth remained within the bands of the Monetary Policy Consultation Clause.
- Tax collection fell well below expectations.
- The Executive Board completed the financing assurances review and granted a waiver of nonobservance of the end-June 2025 performance criterion on the floor on primary balance based on its temporary nature and corrective actions.
- RSF developments:
- Madagascar adopted its first "green budget" and a National Climate Finance Strategy.
- Some RSF reform measures were delayed, partly due to exogenous factors.
- Governance actions:
- Adoption and swift implementation of a homegrown action plan for key recommendations from the IMF governance diagnostic assessment is recommended to strengthen governance and transparency and complement the national anti-corruption strategy.
Policy recommendations and conditionalities emphasized by the IMF
- Fiscal and revenue policy:
- Renewed efforts in domestic revenue mobilization and strengthened public financial management to safeguard fiscal sustainability and create space for social and growth-enhancing spending.
- Tax measures in the supplementary 2026 budget should be complemented by decisive efforts to rationalize tax exemptions and strengthen tax and customs administration.
- Utilities and public services:
- Swift implementation of the recovery plan for the public utilities company (JIRAMA) to improve electricity and water reliability while limiting calls on the State budget.
- Fuel pricing and social protection:
- Full application of the automatic fuel pricing mechanism by January 2027, with targeted mitigating measures to protect the most vulnerable, to redirect public resources toward education, health, and social protection and to contain fiscal risks.
- Ensure a well-functioning fuel market.
- Monetary and exchange rate policy:
- The central bank (BFM) should be ready to tighten monetary policy further if inflationary pressures persist.
- Continued implementation of the BFM modernization agenda to reinforce the interest-based monetary policy framework.
- Maintain exchange rate flexibility to absorb external shocks while safeguarding reserves.
- RSF commitment:
- Strengthened commitment to the RSF reform agenda is needed to enhance climate resilience and complement the ECF’s objective of bolstering socioeconomic resilience.
Key macroeconomic and fiscal indicators (Est. = estimate; Proj. = projection)
- GDP at constant prices: 2023 Est. 4.2; 2024 Est. 4.3; 2025 Est. 3.1; 2026 Proj. 3.8; 2027 Proj. 4.5
- GDP deflator: 2023 8.4; 2024 7.4; 2025 7.5; 2026 8.0; 2027 7.7
- Consumer prices (end of period): 2023 7.5; 2024 8.6; 2025 7.2; 2026 9.3; 2027 7.1
- Broad money (M3) growth: 2023 8.6; 2024 14.6; 2025 8.7; 2026 10.9; 2027 9.2
- Net foreign assets (growth): 2023 18.2; 2024 9.9; 2025 8.8; 2026 -2.9; 2027 4.3
- Credit to the private sector (percent of GDP): 2023 0.7; 2024 5.6; 2025 5.9; 2026 8.1; 2027 7.7
- Total revenue (excluding grants, percent of GDP): 2023 11.3; 2024 11.4; 2025 10.1; 2026 11.2; 2027 11.5
- Tax revenue (percent of GDP): 2023 11.1; 2024 10.9; 2025 9.8; 2026 11.0; 2027 11.3
- Grants (percent of GDP): 2023 2.2; 2024 2.2; 2025 1.3; 2026 1.4; 2027 0.6
- Total expenditures (percent of GDP): 2023 17.7; 2024 16.1; 2025 13.5; 2026 17.1; 2027 15.9
- Current expenditure (percent of GDP): 2023 10.8; 2024 9.6; 2025 8.7; 2026 10.4; 2027 9.2
- Capital expenditure (percent of GDP): 2023 6.9; 2024 6.5; 2025 4.9; 2026 6.6; 2027 6.7
- Overall balance (commitment basis, percent of GDP): 2023 -4.2; 2024 -2.5; 2025 -2.1; 2026 -4.5; 2027 -3.8
- Domestic primary balance1 (percent of GDP): 2023 -0.3; 2024 1.4; 2025 1.2; 2026 0.3; 2027 1.7
- Primary balance (percent of GDP): 2023 -3.5; 2024 -1.9; 2025 -1.4; 2026 -3.5; 2027 0.0
- Total financing (percent of GDP): 2023 4.1; 2024 2.7; 2025 2.0; 2026 4.8; 2027 3.9
- Foreign borrowing (net, percent of GDP): 2023 2.9; 2024 2.5; 2025 2.3; 2026 3.4; 2027 4.2
- Domestic financing (percent of GDP): 2023 1.2; 2024 0.2; 2025 -0.3; 2026 1.3; 2027 -0.3
- Investment (percent of GDP): 2023 20.5; 2024 20.4; 2025 22.3; 2026 25.3; 2027 24.5
- Gross national savings (percent of GDP): 2023 17.4; 2024 18.3; 2025 16.3; 2026 17.0; 2027 18.2
- Exports of goods, f.o.b. (percent of GDP): 2023 19.3; 2024 14.6; 2025 12.7; 2026 12.1; 2027 12.5
- Imports of goods, c.i.f. (percent of GDP): 2023 27.7; 2024 26.2; 2025 25.7; 2026 26.4; 2027 24.9
- Current account balance (exc. grants, percent of GDP): 2023 -6.2; 2024 -8.0; 2025 -7.4; 2026 -9.7; 2027 -6.9
- Current account balance (inc. grants, percent of GDP): 2023 -4.0; 2024 -5.3; 2025 -6.0; 2026 -8.3; 2027 -6.3
- Public debt (percent of GDP): 2023 52.1; 2024 49.8; 2025 47.7; 2026 49.3; 2027 49.5
- External public debt (inc. BFM liabilities, percent of GDP): 2023 37.4; 2024 36.4; 2025 36.3; 2026 39.1; 2027 40.0
- Domestic public debt (percent of GDP): 2023 14.7; 2024 13.4; 2025 11.4; 2026 10.2; 2027 9.5
- Gross official reserves (millions of SDRs): 2023 1,972; 2024 2,160; 2025 2,601; 2026 2,527; 2027 2,619
- Months of imports of goods and services: 2023 5.7; 2024 6.1; 2025 6.9; 2026 6.1; 2027 6.2
- GDP per capita (U.S. dollars): 2023 539; 2024 575; 2025 619; 2026 651; 2027 687