Mada­gas­car's eco­nomic con­di­tions im­prov­ing, says IMF

The Pak Banker - - FRONT PAGE -

An In­ter­na­tional Mon­e­tary Fund (IMF) team, headed by Mar­shall Mills, vis­ited An­tana­narivo, Mada­gas­car, from March 2-13 to as­sess progress un­der the Staff-Mon­i­tored Pro­gram (SMP) with Mada­gas­car.

At the end of the mis­sion, Mr. Mills said, "The Mala­gasy au­thor­i­ties and IMF staff see the staff-mon­i­tored pro­gram (SMP) as a cru­cial tool in guid­ing pol­icy and build­ing a strong track record. Suc­cess­ful im­ple­men­ta­tion of this pro­gram will strengthen eco­nomic sta­bil­ity and sus­tain­abil­ity, pro­vide a frame­work that boosts con­fi­dence and as­sists in cat­alyz­ing ex­ter­nal as­sis­tance, and help lay the ground­work for a fu­ture re­quest for an Ex­tended Credit Fa­cil­ity (ECF) ar­range­ment."

Eco­nomic and fi­nan­cial con­di­tions are im­prov­ing. Growth is ex­pected to ac­cel­er­ate from last year to more than 4 per­cent this year. Eco­nomic ac­tiv­ity will be driven by a re­cov­ery in tourism, which was af­fected by Air Mada­gas­car's op­er­a­tional prob­lems in 2015; strength­en­ing con­struc­tion ac­tiv­ity led by pub­lic in­vest­ment; and re­stored AGOA (African Growth and Op­por­tu­nity Act) el­i­gi­bil­ity ben­e­fit­ing man­u­fac­tur­ing.

With bet­ter rain­fall for most of the coun­try so far this year, agri­cul­tural pro­duc­tion is also ex­pected to re­cover slowly in 2016 af­ter con­tract­ing in 2015. In­fla­tion re­mains con­tained below at 8 per­cent. The ex­ter­nal en­vi­ron­ment is chal­leng­ing, in light of low com­mod­ity prices and slow growth in some ex­port mar­kets.

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