Madagascar's Ministry of Economy and Finance has revised its 2026 growth forecast upward: GDP growth is now expected at 6%, versus the 4.8% initially set in the Finance Law. A significant revision underpinned by services expansion, oil sector development and a rebound in domestic consumption.
Three engines behind the revision
The Malagasy government identifies three main drivers. First, services growth — trade, telecoms, finance — which carries a growing share of formal economic activity. Second, expansion in the oil and gas sector, whose ongoing projects are attracting international investors. Third, a recovery in private consumption, supported by diaspora remittances and declining inflation.
A favourable regional context
This upward revision fits a favourable regional momentum. Madagascar had already posted 6.1% growth in 2024, before an anticipated slowdown to 4.8% early in 2026. The return to 6% confirms a structural trend. According to Africa24, authorities describe the outlook as « encouraging for the national economy » and note that the revision also aims to « attract investors » in an increasingly competitive regional environment for capital.
Structural challenges remain
Despite this positive dynamic, Madagascar still faces significant structural challenges: limited electricity access (fewer than 30% of the population), degraded road infrastructure, commodity dependence and exposure to climate shocks. The 6% forecast assumes a favourable scenario — any external shock (climate, geopolitical or financial) could reduce its magnitude.
Why it matters
For Indian Ocean investors, Madagascar growing at 6% represents one of the region's most dynamic markets. Services, digital and renewable energy sectors offer opportunity windows that the new US-Madagascar partnership further opens. The island remains under-invested relative to its potential — a gap regional decision-makers would be wise to close before international competition moves in.
Sources: Africa24, Ministry of Economy and Finance of Madagascar, African Development Bank — January 2026.