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Madagascar: A Competitiveness and Exchange Rate Assessment
Author:
Luc Eyraud
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 107
Language:
English
Publication Date:
01 May 2009
DOI:
https://doi.org/10.5089/9781451872545.001
ISBN:
9781451872545
ISSN:
1018-5941
Pages:
30
Keywords:
WP; exchange rate; Madagascar; current account; price
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The purpose of this paper is to assess Madagascar's competitiveness in recent years, using both price and nonprice indicators and an exchange rate assessment of the currency. We estimate the distance between the equilibrium and the actual real exchange rates using three methods: the macroeconomic balance approach, the external sustainability approach, and the reduced-form equilibrium real exchange rate approach. These methods suggest that in the medium term the real exchange rate is only slightly overvalued. We also carry out a comparative analysis of nonprice indicators and find that Madagascar performs less favorably than its competitors on structural competitiveness.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund