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IMF says Madagascar economy on the mend

Madagascar’s economy is showing signs of recovery, although spending in key sectors like health and education remain under pressure, an IMF official said on Tuesday.

“There are early signs of an economic recovery, with growth at 3 percent and inflation at under 7 percent in 2014,” said IMF head of mission George Tsibouris, after concluding his visit.

The economy of the Indian Ocean island nation suffered a slump due to the political instability that followed the 2009 ouster of former president Marc Ravalomanana.

“Given still weak tax revenue collections, spending on high-priority areas, such as education and health, continues to be constrained,” said Tsibouris.

The IMF said the country’s current account deficit was projected to narrow to about two percent of GDP in 2014, from five and a half percent in 2013, driven by growing mineral exports, and decreasing food and energy imports.

It urged the government to invest in key infrastructure development, and implement reforms to boost business climate.

The economy of the vast island is dependent on agriculture and fishing.

The government has committed to a reform programme to encourage growth and reduce poverty.