Madagascar - Country Commercial Guide
Market Overview
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Madagascar – with a population of approximately 28 million people - ranks among the poorest countries in the world, with 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.

Although the COVID-19 pandemic and multiple climate shocks caused a GDP contraction of 7.1 percent in 2020 – among the highest in Africa - a recovery in the mining, services, and construction sectors raised economic growth to 5.7 percent in 2021. Growth decelerated to an estimated 3.8 percent in 2022, however, reflecting the impact of repeated natural disasters compounded by a deteriorating global context, as well as new government regulations that contributed to a crash in the market for vanilla, one of Madagascar’s primary exports. In early 2023, two severe tropical storms hit Madagascar, submerging many roads, and flooding and destroying schools and health centers. Rising staple goods’ prices – amplified by the impact of Russia’s invasion of Ukraine on the prices of imported products – fueled inflation, which reached 11.4 percent year-on-year in January 2023.

Political environment

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