The Central Bank of Madagascar (BFM) has published its economic outlook for 2026: growth is expected at 5.1%, a significant jump from the 3.4% recorded in 2025. This renewed optimism rests on a rebound in commodities and a tourism recovery, within a monetary policy framework described as "prudent and gradual".
An expected rebound, driven by natural resources
The mining and agricultural export sectors form the primary engine of this recovery. Nickel, cobalt, cloves and cocoa are expected to rebound in 2026, following difficult years marked by international price volatility. Madagascar holds an advantageous position in these commodity markets — the country is one of the world's leading producers of cloves and titanium — and the bullish price environment in 2026 plays in its favour.
Tourism picking up
The tourism sector, identified as a key generator of foreign exchange, is beginning a recovery after a difficult 2025. Madagascar is leveraging its unique positioning — endemic biodiversity, ecotourism, lemur safaris — to attract high-value international visitors. This dynamic will benefit the broader economy through direct jobs, handicrafts and hospitality.
Solid fundamentals
Madagascar's foreign exchange reserves stand at nearly seven months of imports — a comfortable buffer that reflects macroeconomic stability. Inflation is expected to reach around 6.7% by end-2026, down from 7.2% in December 2025. The central bank notes, however, that high banking liquidity is not sufficiently translating into credit to the real economy — an implicit call for commercial banks to play their role.
Risks to watch
The BFM identifies several risk factors: global geopolitical tensions affecting commodity prices, exchange rate volatility, cyclones (a structural risk for Madagascar), and health uncertainties. These factors could deflect the trajectory if several materialised simultaneously.
Why it matters
At 5.1%, Madagascar would be the second-fastest-growing economy in the Indian Ocean in 2026. For regional investors — Mauritian, Réunionnais, Asian — this dynamism opens windows in mining, green tourism and agri-food. The challenge remains converting this macroeconomic growth into tangible improvements in living standards and sustained attractiveness for foreign direct investment.