Tuesday, November 11, 2008

Madagascar sees 7,5% GDP growth in '09 - govt

Reuters, 10/11/2008

Madagascar's economy is set to grow by 7,5 percent in 2009 with the mining, hotel and agriculture sectors leading expansion, a senior finance ministry official said on Monday.

Parliamentarians on the Indian Ocean Island voted on Friday for a finance bill which also forecast the economy would grow by 7,1 percent this year.

"Our GDP (growth) is predicted to be 7,5 percent for the year 2009," Henri Bernard Razarkariasa, Secretary General at the Ministry of Finance, told Reuters.

Inflation will be higher than expected at 8,8 percent due to the "continued tensions at the international level" according to the bill, but lower than the 11 percent estimated for this year.

Madagascar plans to increase spending in 2009 (Jan-Dec) by 17 percent to 4,074 billion ariary or 21,6 percent of GDP in 2009 from 3,482-billion this year.

It said it hoped to raise taxes worth 2,352 billion ariary.

"The main task when it comes to fiscal receipts will be to reach a level of 2,352 billion ariary," the bill said.

The budget deficit will increase to 4.8 percent of GDP in 2009 from 4,5 percent this year according to the finance bill that will now proceed to the country's senate.

Hit by the worldwide financial crisis, investment for 2009 is expected to be down 2,6 percent on this year at 33,4 percent of GDP.

"Next year will see the start of production and exports from several mines, most notably QMM in the south east of the island," said Razarkariasa.

QIT Madagascar Minerals (QMM), a joint venture between Rio Tinto and the Madagascar government, is mining ilmenite, which is used in products such as food colouring, sunscreen and paint.

Multinational companies are pouring into the world's fourth largest island to capitalise on the country's vast mineral resources and potential oil reserves.

Madagascar is in the early stages of a mining boom for nickel, cobalt, bauxite and ilmenite.

Its two largest mining projects have brought in more than $185-million in investments and created 1 300 jobs.

Exploration companies are also looking for oil, gold, coal, chromium, gemstones, platinum and uranium.

The island is one of the poorest countries in the world, ranked 143rd on the UN's human development index. Earlier this year, it was hit by two successive cyclones killing nearly 100 people and rendering more than 330 000 homeless.