IMF Staff Country Reports

Republic of Madagascar: Second Review Under the Extend Credit Facility Arrangement, Request for Modification of Performance Criteria, Financing Assurances Review, and Second Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Republic of Madagascar

July 31, 2025

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International Monetary Fund. African Dept. "Republic of Madagascar: Second Review Under the Extend Credit Facility Arrangement, Request for Modification of Performance Criteria, Financing Assurances Review, and Second Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Republic of Madagascar", IMF Staff Country Reports 2025, 221 (2025), accessed August 2, 2025, https://doi.org/10.5089/9798229018999.002

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Summary

Following uncertainty prior to the mayoral elections, Madagascar was hit hard by weather-related events in early 2025 and, most notably external shocks: some discontinuation in official development assistance (ODA) (about 1 percent of GDP) and the U.S. tariff hike (47 percent initially). These developments risk setting Madagascar back, considering the country’s reliance on external financing (USAID support was omnipresent) and exposure of its labor-intensive textile industry and vanilla sector to the U.S. market. The Extended Credit Facility (ECF)and Resilience and Sustainability Facility (RSF) remain focused on helping enhance overall socio-economic resilience (in a fragile political context), in line with the General State Policy (PGE).

Subject: Arrears, Budget planning and preparation, Credit, Expenditure, External debt, Fiscal policy, Fiscal stance, Fuel prices, Money, Prices, Public debt, Public financial management (PFM), Revenue administration

Keywords: Arrears, Budget planning and preparation, Credit, Fiscal risks, Fiscal stance, Fuel prices, Tax refunds

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