Generally, the economy of Madagascar has been performing well, with an estimated growth of 4.2 % in 2017 and projected at 5.0 % in 2018, according to the latest edition of the World Bank’s Madagascar Economic Update, released on the 31st of July, 2018.
The report explains the recent economic developments and presents medium-term outlook for the country. It shows that there are several drivers of growth, which include an increased demand for transport services, a profitable banking sector and strong performance of goods and services produced in economic processing zones, contributing to solid export earnings and the accumulation of reserves.
“While the economy is projected to continue expanding over the medium-term, focusing on inclusive growth is essential for poverty reduction, this positive macroeconomic outlook, conditioned by the pursuit of economic and fiscal reforms and a stable political environment, provides opportunities to reduce poverty,” said Coralie Gevers, World Bank Country Manager for Madagascar.
The projected growth of the economy deduces that the proportion of the Malagasy population living under the poverty line will likely decrease. The poverty headcount, based on $1.90 a day line is projected to lower from 75 % in 2018 to 73 % in 2020.
A special focus section of this Economic Update addresses financial inclusion. Over the past years, mobile money has been expanding to increase access to financial services for individuals and firms. These opportunities provide a means for safely storing money, as well as increasing access to other services such as credit in times of crisis and insurance to prepare for bad days.
A new National Strategy for Financial Inclusion (2018- 2022) is under preparation with the objective of increasing the number of adults with access to formal financial services from 29 % in 2016 to 45 percent in 2022.