The Malagasy government has unveiled its 2026 Finance Act targeting 4.8% growth, a slight acceleration from the 4.2% recorded in 2024. GDP is projected at 100,181 billion ariary, against a backdrop of still-high inflation — 7.1% in 2024 — and persistent structural challenges.
Four strategic priorities
The budget law organises the development strategy around four pillars: agriculture (rice self-sufficiency and crop diversification), energy (renewable energy transition), infrastructure (roads, ports, airports) and human development (education, health, water and social protection). These four pillars mirror the commitments of the Plan Emergence Madagascar (PEM), whose implementation remains partial.
IMF stays more cautious
The International Monetary Fund is more conservative, projecting 3.9% growth for 2025, revised down from an earlier forecast of 4.6%. The World Bank, for its part, anticipates an average of 4.7% between 2025 and 2027. Key risk factors include chronic energy shortfalls weighing on business competitiveness, saturation in the global vanilla market — with an estimated surplus of 3,000 tonnes — and weak nickel and cobalt prices, two critical exports for the country.
Why it matters
Despite its natural wealth, Madagascar remains one of the world's poorest countries. A 4.8% target is ambitious but falls short of the 6–7% threshold generally considered necessary for meaningful poverty reduction. The credibility of the Finance Act will hinge on the state's ability to mobilise domestic revenues and to execute the structural reforms expected by its technical and financial partners.