Abstract
This paper discusses key findings of the Fourth Review Under the Poverty Reduction and Growth Facility (PRGF) for Madagascar. Program performance has been generally good. The authorities have continued to implement sound fiscal and monetary policies that have resulted in good macroeconomic outcomes. They met all of the quantitative performance criteria (PCs) for end-January 2008, but missed two structural PCs. The international reserves cover is expected to deteriorate markedly, prompting the authorities to ask for an augmentation of 15 percent of quota, a request that IMF staff supports.
This statement summarizes economic developments since the issuance of the staff report. These developments do not alter the thrust of the staff appraisal.
Annual inflation rose to 8.7 percent in May 2008 (in line with expectations) due to an acceleration in the food component. There continues to be a gradual and steady appreciation of the Ariary through end–June 2008.
Preliminary data through end–May 2008 indicate that the monetary and fiscal programs (including in terms of tax revenue collections) remain on track.
Preliminary evidence indicates that the authorities have met the structural benchmark for the “review of BCM guidelines on management of foreign exchange reserves” at end–June 2008.
Further information will be needed in order to assess whether the end–June benchmark for the “automatic transfer of data on revenue collection by the Directorate General of Taxation and the Directorate General of Customs to the Directorate General of the Treasury via SIGFP” was met.