Madagascar Economy - 2021

GEOGRAPHICAL NAMES 

Economic overview

Madagascar is a mostly unregulated economy with many untapped natural resources, but no capital markets, a weak judicial system, poorly enforced contracts, and rampant government corruption. The country faces challenges to improve education, healthcare, and the environment to boost long-term economic growth. Agriculture, including fishing and forestry, is a mainstay of the economy, accounting for more than one-fourth of GDP and employing roughly 80% of the population. Deforestation and erosion, aggravated by bushfires, slash-and-burn clearing techniques, and the use of firewood as the primary source of fuel, are serious concerns to the agriculture dependent economy.

After discarding socialist economic policies in the mid-1990s, Madagascar followed a World Bank- and IMF-led policy of privatization and liberalization until a 2009 coup d’état led many nations, including the United States, to suspend non-humanitarian aid until a democratically-elected president was inaugurated in 2014. The pre-coup strategy had placed the country on a slow and steady growth path from an extremely low starting point. Exports of apparel boomed after gaining duty-free access to the US market in 2000 under the African Growth and Opportunity Act (AGOA); however, Madagascar's failure to comply with the requirements of the AGOA led to the termination of the country's duty-free access in January 2010, a sharp fall in textile production, a loss of more than 100,000 jobs, and a GDP drop of nearly 11%.

Madagascar regained AGOA access in January 2015 and ensuing growth has been slow and fragile. Madagascar produces around 80% of the world’s vanilla and its reliance on this commodity for most of its foreign exchange is a significant source of vulnerability. Economic reforms have been modest and the country’s financial sector remains weak, limiting the use of monetary policy to control inflation. An ongoing IMF program aims to strengthen financial and investment management capacity.

Real GDP growth rate

4.2% (2017 est.)

4.2% (2016 est.)

3.1% (2015 est.)

Inflation rate (consumer prices)

5.6% (2019 est.)

8.6% (2018 est.)

8.5% (2017 est.)

Real GDP (purchasing power parity)

$44.419 billion (2019 est.)

$42.363 billion (2018 est.)

$40.514 billion (2017 est.)

note: data are in 2010 dollars

GDP (official exchange rate)

$13.964 billion (2019 est.)

Real GDP per capita

$1,647 (2019 est.)

$1,613 (2018 est.)

$1,584 (2017 est.)

note: data are in 2010 dollars

Gross national saving

18.2% of GDP (2018 est.)

15.1% of GDP (2017 est.)

11.2% of GDP (2015 est.)

GDP - composition, by sector of origin

agriculture: 24% (2017 est.)

industry: 19.5% (2017 est.)

services: 56.4% (2017 est.)

GDP - composition, by end use

household consumption: 67.1% (2017 est.)

government consumption: 11.2% (2017 est.)

investment in fixed capital: 15.1% (2017 est.)

investment in inventories: 8.8% (2017 est.)

exports of goods and services: 31.5% (2017 est.)

imports of goods and services: -33.7% (2017 est.)

Ease of Doing Business Index scores

Overall score: 47.7 (2020)

Starting a Business score: 88.5 (2020)

Trading score: 61 (2020)

Enforcement score: 50 (2020)

Agricultural products

rice, sugar cane, cassava, sweet potatoes, milk, vegetables, bananas, mangoes/guavas, tropical fruit, potatoes

Industries

meat processing, seafood, soap, beer, leather, sugar, textiles, glassware, cement, automobile assembly plant, paper, petroleum, tourism, mining

Industrial production growth rate

5.2% (2017 est.)

Labor force

13.4 million (2017 est.)

Unemployment rate

1.8% (2017 est.)

1.8% (2016 est.)

Population below poverty line

70.7% (2012 est.)

Gini Index coefficient - distribution of family income

42.6 (2012 est.)

42.7 (2010)

Household income or consumption by percentage share

lowest 10%: 2.2%

highest 10%: 34.7% (2010 est.)

Budget

revenues: 1.828 billion (2017 est.)

expenditures: 2.136 billion (2017 est.)

Taxes and other revenues

15.9% (of GDP) (2017 est.)

Budget surplus (+) or deficit (-)

-2.7% (of GDP) (2017 est.)

Public debt

36% of GDP (2017 est.)

38.4% of GDP (2016 est.)

Fiscal year

calendar year

Current account balance

-$35 million (2017 est.)

$57 million (2016 est.)

Exports

$5.272 billion (2019 est.)

$5.06 billion (2018 est.)

$4.839 billion (2017 est.)

Exports - partners

United States 19%, France 18%, United Arab Emirates 7%, China 6%, Japan 6%, Germany 5%, India 5% (2019)

Exports - commodities

vanilla, nickel, gold, clothing and apparel, gemstones (2019)

Imports

$5.855 billion (2019 est.)

$5.56 billion (2018 est.)

$5.796 billion (2017 est.)

Imports - partners

China 24%, France 11%, United Arab Emirates 9%, India 7%, South Africa 5% (2019)

Imports - commodities

refined petroleum, rice, cars, packaged medicines, clothing and apparel (2019)

Reserves of foreign exchange and gold

$1.6 billion (31 December 2017 est.)

$1.076 billion (31 December 2016 est.)

Debt - external

$3.085 billion (2019 est.)

$4.107 billion (2018 est.)

Exchange rates

Malagasy ariary (MGA) per US dollar -

3,116.1 (2017 est.)

3,176.5 (2016 est.)

3,176.5 (2015 est.)

2,933.5 (2014 est.)

2,414.8 (2013 est.)

NOTE: The information regarding Madagascar on this page is re-published from the 2021 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Madagascar 2021 information contained here. All suggestions for corrections of any errors about Madagascar 2021 should be addressed to the CIA or the source cited on each page.