IMF mission visits Madagascar

From October 5 to 9, an IMF mission led by Constant Lonkeng visited Antananarivo, the capital of Madagascar, to assess the country's economic situation and the implementation of its 2026 budget. The team also discussed the preparation of the 2027 budget and the progress of reforms supported by the IMF.

IMF urges faster budget reforms

The International Monetary Fund (IMF) is urging Malagasy authorities to speed up budget reforms to address shortfalls in public revenues and support economic recovery. This was stated in a press release published on Monday, October 12, emphasizing the need to implement measures aimed at rationalizing tax spending as outlined in the supplementary finance law.

Budget implementation faces delays

The IMF highlighted the slow implementation of the 2026 budget, which it attributes to administrative blockages. To support economic activity, the government plans to accelerate public investments while maintaining its target for a primary budget surplus by the end of the year.

Revenue collection lags behind targets

The 2026 supplementary finance law sets a budgetary revenue target of 2.4 billion dollars, a 1.6 percent increase from the initial budget. However, internal tax revenues collected in the second quarter of 2026 were 2,838.8 billion ariary, or about 45.6 percent of annual forecasts, according to the General Directorate of Budget.

IMF recommends improving revenue and fuel pricing

The IMF is recommending that Madagascar increase domestic revenues and fully restore the automatic price adjustment mechanism for fuels to strengthen its budget strategy. These recommendations come as the country faces a fragile economic situation, including disruptions in water and electricity supply, the aftermath of tropical cyclone Gezani in 2026, and rising global oil prices due to the war in the Middle East.

Economic situation to be reviewed soon

Madagascar is also undergoing a political transition following the 2025 demonstrations. The country's economic situation and budgetary prospects will be reviewed during the fifth assessments of the programs supported by the Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF), scheduled for the coming months.