Madagascar: Recent Economic Developments

International Monetary Fund

No 1995/064, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper describes the economic developments in Madagascar during the 1990s. In early 1994, the authorities prepared a medium-term policy statement with an outward orientation. Accordingly, a sweeping reform of the exchange and trade system was implemented in May 1994, including the floating of the Malagasy franc. However, financial policy was not sufficiently supportive: ad hoc tax exemptions were granted, particularly to foodstuffs and petroleum products, and other taxes were not fully collected. Thus, the fiscal deficit deteriorated, leading to a sharp acceleration in money creation and inflation, which rose to 61 percent by end-1994.

Keywords: ISCR; CR; exchange rate; broad money; trade balance; balance of payments; SDR terms; free trade zone; equity capital; stabilization fund; payments arrears; basic rate; GDP ratio; Commercial banks; Arrears; Exports; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 89
Date: 1995-07-20
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