The services of the IMF examine the state of progress of the economic programme of Madagascar

MIL OSI Translation. Region: France and French Territories –

Source: imf – News in French

on September 26, 2018Les press releases issued at end of mission by IMF staff, which include statements that express their preliminary observations at the end of their stay in a country. The opinions expressed in this press release are solely those of the IMF staff and are not necessarily those of the board of directors. From the preliminary findings of the mission, the IMF staff will prepare a report that, subject to management approval, will be presented to the board of directors for review and decision.Economic growth should exceed 5% this year, the highest rate of the past ten years.The control of expenditure in non-priority and increasing revenue remain the key to continuing the increase in public investment and social spending.The fight against corruption remains critical to improve governance and avoid the economic impacts are considerable.A team from the international monetary Fund (IMF) led by Mr. Marshall Mills, mission chief to Madagascar, visited Antananarivo and Toamasina, from 12 to 26 September 2018. The team spoke with the authorities on the fourth review of the program of economic reforms in Madagascar, supported by the IMF through the three-year arrangement under the extended credit facility (ECF) [1].At the end of the mission, Mr. Mills made the following statement :” The economic situation in Madagascar has continued to improve. The growth is expected to exceed 5% this year, the highest rate of the past ten years. This result is supported by a rebound of agricultural production, particularly rice, as well as an increase in public investment. In spite of the increase in international oil prices, the situation of the external sector remained favourable, with a very good performance of exports, supported by price and volume levels of the vanilla and mining products. After a peak at the end of the year 2017, inflation has declined, on a continuous basis and should be reduced to 7 % by the end of the year. Raise the standard of living of the population, however, requires sustainable and inclusive growth.” Overall, the implementation of the program supported by the FEC continues to be satisfactory. All the quantitative targets of the program for the first half of the year have been achieved, with the exception of the level of social spending, temporarily lower than expected. The Central Bank has continued to accumulate foreign-exchange reserves, which reached a record level. In general, the budget was executed as planned. The program of structural reforms has also continued to make progress, as evidenced by the opening of the first pole anti-corruption.” The reorientation continues in public spending less productive towards the capital expenditure and the social expenditure remains at the heart of the program. Delays in the adjustment of prices at the pump — against a background of rising world oil prices, social tension, and further negotiations on the price structure — have generated a high amount of the liabilities to the distributors. The services of the IMF have strongly encouraged the authorities to minimize the impacts of this increase in the liability on the budget and spending priorities by aligning progressively the price at the pump at a level consistent with the return to the truth of price and auditing the debts as quickly as conditions allow. The authorities are considering measures to mitigate the effects of price adjustment on the most vulnerable layers of the population. Although the national utility company JIRAMA has made progress in reducing its need for transfers, the services of the IMF have stressed the need to redouble efforts to limit grants in the next year, in accordance with the objectives of the authorities.” In addition, the mission and the authorities discussed the major reforms underway in the areas of monetary policy, the financial sector and public finance management, implemented with the technical assistance of the IMF. The Central Bank has continued to strengthen its operational framework in order to better manage bank liquidity and limit volatility on the foreign exchange market, while accumulating reserves.” The authorities and the IMF staff agreed on the priority of improving governance and the fight against corruption. The services have emphasized that it was crucial to adopt by the end of the year the two laws relating to the recovery of illegal assets and fight against money laundering, already submitted to the parliament by the government. Do not adopt these two laws could expose Madagascar to significant economic and financial implications, especially in regards to the cost of cross-border transactions.” The mission met with the President of the Republic by interim, Mr. Rivo Rakotovao, the Prime Minister, Mr Christian Ntsay, the Minister of Finance and Budget, Ms. Vonintsalama Andriambololona, the Governor of the Central Bank, Mr. Alain Rasolofondraibe, senior officials, and representatives of the private sector, civil society and development partners.” The mission wishes to thank the malagasy authorities for their close cooperation and for constructive discussions. “

[1] The FEC is a loan mechanism that provides ongoing support in the medium-or long-term in the form of a program in the case of the persistent problems of balance of payments

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