Madagascar – Economic Update: A closer look at three stratégic areas (BM. Octobre 2010)

Posted on 18 octobre 2010


Mise en ligne d’un fichier qui m’a été transmis,  mais dont je n’ai pas réussi à retrouver trace du lien direct sur le site de la BM. On y parle des équilibres économiques du pays, de la politique monétaire et de la politique des prix sur deux produits stratégiques : le riz et l’essence … mais aussi de la rectification de la Loi de Finances 2010 … Extraits :

On the economic front, Madagascar’s quest for stability (albeit not growth) has continued with persistent trends in major indicators over the last few months. Yet, the authorities have been managing strategic prices, intervening on the exchange rate market, and adopting the Revised Budget Law. Those new actions, partly the Government’s response to exogenous factors (i.e.,increases in international commodity prices and non‐traditional capital inflows), have and will influence significantly but unevenly a large variety of stakeholders. The magnitude of these impacts might in turn shape not only future policy but also political decisions. […]

Beyond the above adjustments, it is useful to emphasize three key features of the revised Budget Law:
• The Government anticipates using more domestic resources to finance its deficit, up by 0.5% of GDP compared to the initial Law. This increase is not marginal, since it is equivalent to about 5% of the total stock of credits in the country.
• It has to be recognized that the fiscal adjustment is more cosmetic than real because the execution rate of public expenditures was very low during the first eight months of 2010 (around 42%). In other words, the authorities had already taken into account the unrealistic level of external financing and cut public spending accordingly.8 The revised law is still valuable because it would prevent any future “loss of control”, avoiding the episode that occurred during the last quarter of 2009 when expenditures jumped by almost US$500 million.
• The composition of public expenditures has been shifted in favor of the Presidency at the expense of social and infrastructure ministries. Part of this shift is explained by the decline in aid flows that were targeted to social and infrastructure sectors, and by political motives to place the Presidency at the center stage of public spending (funding highly visible projects).
From a fiscal perspective, the large increase in non‐fiscal revenues has helped to release the Government’s constraint. Yet, concerns have been raised about the economic and social returns associated to the use of those funds (mostly directed to the construction of large stadiums and hospitals), fueled by the quasi‐absence of open discussion among a wide range of stakeholders and by the need to finance future costs of maintenance and functioning that are expected to be relatively high. Most sector ministries seem also to have been by‐passed in the process. Those shortcomings have contributed to exacerbate tensions within public administration at time of budget austerity.[…]

[…] Looking forward

On the surface, the Malagasy economy seems to continue its journey toward stability (albeit not economic growth). Thanks to prudent fiscal and monetary policies, most financial indicators have remained stable, and in the quasi‐absence of violence, a segment of the economy has weakly rebounded over the past semester. As a result, the GDP growth rate
should improve in 2010 compared to the 3.7% recession observed last year.
The quest of Madagascar for economic stability –in a volatile political environment, remains fragile. The focus here given to strategic prices (petroleum products and rice), exchange rate policy, and fiscal  management has illustrated that the current equilibrium might be unsettled by exogenous factors. The variations observed in key local prices and in the exchange rate are linked to recent fluctuations in the price of commodities on international markets. The shift in the composition of fiscal spending is associated to the availability of a new source of external financing. Those three strategic policy areas go to the heart of the Madagascar’s political economy because they influence a wide range of stakeholders, from farmers to oil distributors and exporters as well as public administration. Their reactions, and the Government’s response, will affect the economic and most certainly the political environment in the coming months. […]

In extenso le fichier complet au format pdf ci-après :


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