Statement by an IMF Staff Mission to the Republic of Madagascar

Press Release No. 08/72
April 7, 2008

An International Monetary Fund (IMF) Mission, led by George Tsibouris, visited Antananarivo during March 26-April 4, 2008, to hold discussions for the fourth review of Madagascar's economic program supported under the IMF's Poverty Reduction and Growth Facility (PRGF).1 The mission met with His Excellency President Marc Ravalomanana, Minister of Finance and Budget Haja Nirina Razafinjavato, Minister of Economy, Plan, Private Sector, and Trade Ivohasina Razafimahefa, Central Bank of Madagascar Governor Frédéric Rasamoely, other senior officials of the Government of the Republic of Madagascar, as well as representatives from the private sector, non-governmental organizations, labor unions, and the donor community.

The mission issued the following statement in Antananarivo on April 4, 2008.

"Madagascar's economy continues to perform well. Real GDP growth is estimated to have risen to 6.1 percent in 2007, reflecting prudent macroeconomic policies, ongoing construction for large mining projects, and progress in structural reforms. After a peak in early-2007, inflation declined to single digits reaching 8.2 percent at end-December 2007. Fiscal performance was characterized by a notable improvement in revenue collections. Foreign exchange reserves increased further and are at comfortable levels.

"Performance under the government's program supported by the PRGF arrangement was generally good. All quantitative performance criteria and structural benchmarks at end-January 2008 were met, however there was a slight delay for one structural performance criterion relating to strengthening customs control.

"The outlook for 2008 remains positive, despite the macroeconomic challenges posed by the exogenous shocks resulting from the sizable increases in world food and petroleum prices, the recent cyclones, and the slowdown in global growth. The mission reached preliminary understandings on a set of policies that could underpin the economic program for the remainder of 2008. These policies include: (i) a revised fiscal program for 2008 consistent with the government's macroeconomic objectives; (ii) continued reforms of the tax and customs administrations; (iii) strengthened public financial management; (iv) an appropriately tight monetary and exchange policy to entrench single digit inflation; and (v) measures to foster private sector growth.

"Discussions on the fourth review of the PRGF program will continue during the IMF Spring Meetings in Washington in mid-April 2008.

"The mission would like to thank the authorities for their excellent cooperation and the frank and constructive discussions."


1 The PRGF is the IMF's concessional lending facility for low-income countries. PRGF loans carry an annual interest rate of 0.5 percent, and are repayable over 10 years with a 5 ½ year grace period on principal payments.



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