IMF sees Madagascar 2008 growth rising to 7,3%
Madagascar's gross domestic product (GDP) is set to grow 7,3 percent this year after 6,3 percent in 2007, boosted by mining investments, textiles, and tourism, the International Monetary Fund said.
Witnessing an incipient mining boom, the world's fourth largest island is opening its roughly $8,6-billion economy, reversing decades of isolation and stagnation.
"Economic growth is projected to be 7,3 percent, owing to the impact of major mining investments on the construction sector and the strong performance of the textile sector and tourism," the IMF said in a report released at the weekend.
The implementation of two major mining projects -- an ilmenite mine in the south and a nickel mine just east of the capital Antananarivo -- are estimated to cost $4-billion between 2006 and 2010, the IMF report said.
"Annual real GDP growth should more than double compared to the average for the past decade, reaching 8 percent on average over 2008-11, while inflation is expected to continue on its downward path to 5 percent," the report also said.
Inflation was 8.2 percent at the end of 2007, down from 10.9 percent a year ago, linked to tight monetary policy and the appreciation of Madagascar's currency, the ariary, it added.
The ariary appreciated 11 percent in 2007, according to central bank data.
The current account deficit should peak at about 24 percent of GDP in 2008 and then decline to about 8 percent of GDP by 2011 as mining exports commence, the report said.
Madagascar is liberalising its trade, phasing out duties on imports from the Southern African Development Community (SADC) by 2012, the report noted.
