Madagascar: World Bank predicts low economic growth rate this year

The World Bank forecasts a lower economic growth rate this year in Madagascar. While the Malagasy authorities are forecasting a positive growth rate of 5.4% this year, away from the framework of the initial 2022 Finance Law, World Bank, economic situation note published yesterday- which estimates that it should not pass 2.6% this year, against 4.4% last year.

Madagascar's economy "faces new threats from new episodes of COVID-19 (coronavirus), a series of extreme weather events and the fallout from the conflict in Ukraine in early 2022," says the World Bank. But it is the war in Ukraine that will have the greatest impact on Madagascar's economic development, due to the slowdown in demand from trading partners and the rise in oil prices, which is expected to lead to a deterioration in the trade balance and increasing pressure on public finances.

"In the face of new shocks and uncertainties, Madagascar needs more than ever to undertake bold reforms to accelerate growth and build resilience," said Idah Z. Pswarayi-Riddihough, the World Bank's Director of Operations for Comoros, Madagascar, Mauritius and Mozambique. "This is a necessity to reduce poverty in the years to come and avoid a growing backwardness compared to peer countries."

Thus, the World Bank, which is among the potential financial partners of the Big Island, establishes a number of priorities that are highlighted as particularly urgent: a clear strategy to accelerate the immunization of people living in vulnerable situations, in urban and tourist areas, the restoration of essential public services and connectivity infrastructure following the recent climatic shocks, strong measures to reduce food insecurity and stimulate national agricultural production, reforms in fuel and electricity pricing, a new impetus to stimulate access to broadband and digital services and more transparency and accountability in the public sector.

This World Bank report also highlights the importance of improving the performance of public schools following the continued deterioration of learning outcomes in recent years. Based on new analytical findings, the report suggests a new approach to improving performance that includes measures to strengthen teacher selection and evaluation, salary and school grant management, appeal mechanisms, and local community participation.