Madagascar Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in madagascar, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Market Overview
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Madagascar’s population is estimated at 30.3 million as of 2023. The country ranks among the poorest nations in the world with a persistently high poverty rate (80.7 percent in 2023, $2.15 per person per day) and high and rising levels of inequality and unemployment. Progress in achieving sustainable development goals remains slow and Madagascar continues to face major economic and social challenges, exacerbated by climate change and external economic shocks. In addition, low productivity, driven by poor infrastructure and human capital development, is hampering economic growth. 

Madagascar’s economic growth is estimated at 4.2 percent in 2024 from 4.0 percent in 2023, driven by commerce, real estate, public works and services. The tourism sector continues its post-pandemic slow recovery, with tourist arrivals nearing the pre-covid levels. Growth is expected to reach 5 percent in 2025 supported by increased private investment and structural reforms, particularly in mining, agriculture, and ICT, as well as several scattered efforts to enhance the investment climate, which have been slow to produce tangible results. 

Inflation reached 8.6 percent in 2024 due to higher agricultural and goods prices. The central bank raised its policy rates in August 2024 in response to persistent inflationary pressures, which it has maintained to date. The banking sector remains profitable, resilient and liquid, witnessed particularly with two acquisitions/transfers, a new bank, and many new microfinance operators within the last couple of years. The current account deficit assessed widened to 5 percent of GDP in 2024, primarily due to lower exports for several major exports (nickel, vanilla, apparel). International currency reserves increased to 6.2 months equivalent of imports from 5.7 following the disbursement of external-funded projects and remittances. Public debt increased to an estimated 41 percent of GDP as of September 2024, a slight increase from 36 percent in 2022 following new externally contracted loans, mainly from multilateral partners. 

Continued reform efforts, particularly in public utilities, beginning with real pricing for fossil fuel products, will be critical to sustaining fiscal and macroeconomic stability. However, downside risks remain, including the weak financial performance of state-owned enterprises, frequent power outages, and vulnerability to external shocks such as commodity price fluctuations and adverse weather.

Chronic political instability associated with financial mismanagement and weak control of natural resources continues to contribute to a high poverty rate and food insecurity. Biased administrative procedures, widespread corruption, fraud, and cronyism undermine economic productivity. 

Political environment

Visit State Department’s website for background on the country’s political and economic environment.

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