The current account deficit widened to 5.4 percent of GDP in 2024, due to continued weak performance in some mining subsectors; it is expected to widen further (to 6.1 percent of GDP) this year, amidst challenging prospects in the textile industry and the vanilla sector
WASHINGTON D.C., United States of America, July 3, 2025/APO Group/ --
- The IMF Executive Board completed the Second Reviews under the Extended Credit Facility (ECF) arrangement and the Resilience and Sustainability Facility (RSF) arrangement for the Republic of Madagascar, allowing for an immediate disbursement of SDR 77.392 million (about US$107 million).
- Madagascar’s performance under the ECF and RSF has been satisfactory. The recent adoption of a recovery plan for the public utilities company (JIRAMA) and the continued implementation of the automatic fuel price adjustment mechanism will release space for critical development needs while helping improve energy supply.
- Recent weather-related events, reduction in official development assistance (ODA) and the U.S tariff hike risk setting Madagascar back; they constitute a wakeup call.
The Executive Board of the International Monetary Fund (IMF) completed today the Second Reviews under the 36-month Extended Credit Facility (ECF) arrangement and under the 36-month Resilience and Sustainability Facility (RSF) arrangement. The ECF and RSF arrangements were approved by the IMF Executive Board in June 2024 (see PR24/232). The authorities have consented to the publication of the Staff Report prepared for this review.[1]
The completion of the reviews allows for the immediate disbursement of SDR 36.66 million (about US$50 million) under the ECF arrangement and of SDR 40.732 million (about US$56 million) under the RSF arrangement.
Madagascar has been hit by a myriad of shocks this year, including weather-related events and the dual external shock of ODA reduction (by about 1 percent of GDP) and U.S. tariff hike (47 percent initially). These developments would take a toll on growth, considering the country’s high dependence on external financial support and the exposure of its vanilla sector and textile industry to the U.S. market. Growth in 2025 would be lower-than-previously expected at 4 percent.
The current account deficit widened to 5.4 percent of GDP in 2024, due to continued weak performance in some mining subsectors; it is expected to widen further (to 6.1 percent of GDP) this year, amidst challenging prospects in the textile industry and the vanilla sector.
Program performance has been satisfactory, with all end-December 2024 quantitative performance criteria and three out of four indicative targets having been met. M3 growth was within the bands of the Monetary Policy Consultation Clause. All but one structural benchmark for the review period were also met. On the RSF front, a new forest carbon framework that promotes private sector participation in the reforestation was adopted and the National Contingency Fund for disaster risk management was operationalized.
At the conclusion of the Executive Board discussion, Mr. Nigel Clarke, Deputy Managing Director, and Acting Chair, made the following statement:
“Performance improved gradually over the first half year of the program, following delays related to mayoral elections; all but one of the end-December 2024 quantitative targets were met, and notable progress was achieved in the structural reform agenda. Recent weather-related and external shocks call for spending reprioritization, deliberate contingency planning in budget execution, and letting the exchange rate act as a shock absorber.
“The recent adoption of a recovery plan for the public utilities company (JIRAMA) is a step in the right direction. Its swift implementation will help address pervasive disruptions in the provision of electricity to households and businesses, while limiting calls on the State budget. The continued implementation of the automatic fuel pricing mechanism will also help contain fiscal risks with targeted measures to support the most vulnerable.
“Pressing ahead with domestic revenue mobilization efforts and enhancing public financial management and the public investment process remain key to fiscal sustainability. Early preparations for the 2026 budget will allow for stronger buy-in from domestic stakeholders; the budget should be anchored in a well-articulated medium-term fiscal strategy that accounts for the implementation of JIRAMA’s recovery plan and creates space for critical development spending.
“While inflation has receded slightly from its January peak, the central bank (BFM) should not loosen monetary policy until inflation is on a firm downward path. Further improvements in liquidity management, forecasting and communication will strengthen the implementation of the BFM’s interest-based monetary policy framework. Maintaining a flexible exchange rate will help absorb external shocks.
“A swift implementation of the authorities’ anti-corruption strategy (2025-2030), together with a homegrown action plan for implementing key recommendations from the IMF Governance Diagnostic Assessment (GDA), will improve transparency and the rule of law, support the authorities fight against corruption and protect the public purse.
“The authorities’ continued commitment to their reform agenda under the Resilience and Sustainability Facility (RSF) will support climate adaptation in Madagascar and complement the Extended Credit Facility (ECF) in fostering overall socio-economic resilience.”
Table. Madagascar: Selected Economic Indicators
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2022
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2023
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2024
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2025
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2026
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Est.
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Proj.
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(Percent change; unless otherwise indicated)
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National Account and Prices
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GDP at constant prices
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4.2
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4.2
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4.2
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4.0
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4.0
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GDP deflator
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9.6
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7.5
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7.6
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8.3
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7.0
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Consumer prices (end of period)
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10.8
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7.5
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8.6
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8.3
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7.3
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Money and Credit
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Broad money (M3)
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13.8
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8.6
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14.6
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13.7
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8.7
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(Growth in percent of beginning-of-period money stock (M3))
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Net foreign assets
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0.8
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18.2
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9.8
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1.5
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1.4
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Net domestic assets
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13.0
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-9.7
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4.8
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12.2
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7.4
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of which: Credit to the private sector
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9.8
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0.7
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5.6
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6.0
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6.2
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(Percent of GDP)
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Public Finance
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Total revenue (excluding grants)
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9.5
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11.5
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11.4
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11.2
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12.0
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of which: Tax revenue
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9.2
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11.2
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10.9
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10.7
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11.7
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Grants
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1.3
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2.3
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2.3
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0.7
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0.4
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Total expenditures
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16.2
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17.9
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16.2
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15.7
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16.5
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Current expenditure
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10.8
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10.9
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9.6
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9.7
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9.5
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Capital expenditure
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5.4
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7.0
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6.6
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6.0
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7.0
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Overall balance (commitment basis)
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-5.5
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-4.2
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-2.6
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-3.9
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-4.1
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Domestic primary balance1
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-1.8
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-0.3
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1.3
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0.3
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1.4
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Primary balance
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-4.9
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-3.5
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-1.9
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-2.9
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-3.0
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Total financing
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4.7
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4.2
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2.7
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4.3
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4.3
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Foreign borrowing (net)
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2.4
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3.0
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2.6
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3.5
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3.7
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Domestic financing
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2.2
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1.2
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0.1
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0.8
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0.5
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Fiscal financing need2
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0.0
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0.0
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0.0
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0.0
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0.0
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Savings and Investment
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Investment
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21.8
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19.9
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22.2
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23.1
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24.2
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Gross national savings
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16.8
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15.9
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16.9
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17.0
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18.2
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External Sector
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|
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Exports of goods, f.o.b.
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23.0
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19.5
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14.8
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13.5
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13.2
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Imports of goods, c.i.f.
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33.8
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28.0
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26.4
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25.7
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25.5
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Current account balance (exc. grants)
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-6.6
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-6.3
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-8.1
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-6.8
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-6.4
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Current account balance (inc. grants)
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-5.4
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-4.1
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-5.4
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-6.1
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-6.0
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Public Debt
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50.0
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52.7
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50.3
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50.9
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52.2
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External Public Debt (inc. BFM liabilities)
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36.1
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37.8
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36.7
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38.5
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40.4
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Domestic Public Debt
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13.9
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14.8
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13.6
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12.4
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11.7
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(Units as indicated)
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Gross official reserves (millions of SDRs)
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1,601
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1,972
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2,189
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2,297
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2,337
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Months of imports of goods and services
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4.2
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5.7
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6.2
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6.2
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6.0
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GDP per capita (U.S. dollars)
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529
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533
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569
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|
596
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621
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Sources: Malagasy authorities; and IMF staff estimates and projections.
1. Primary balance excl. foreign-financed investment and grants.
2. A negative value indicates a financing gap to be filled by budget support or other financing still to be committed or identified.
[1] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the imf.org/MDG page.
Distributed by APO Group on behalf of International Monetary Fund (IMF).
For those of us in diaspora, we get our daily news about Somaliland from Somaliland media.
The problem we are facing nowadays is that rearly do we get an impartial news.
They are either for or againest the current government, these not a true media but a hired guns or a clan leaning which do not help Somaliland causes. we need a true media reports who can be as neutral as possible and pass on the fact on the ground not what they heard from the government or opposition parties.
For example, the current crisis we hear from the government point of view is why they are right and will not accept the server and why they kicked out the interpeace guy from the Country, and then we here the opposition side saying why it is wrong not to use the server and to remove the guy from the country.
We need an impartial news media to Inform us the truth and we can make our correct decision.
What you guys are doing now is to open many doors for Somaliland enemies to take an advantage of current crisis and attack Somaliland from every corner.
Somaliland news Media, please give us the fact and be true patriotic to your country.
Long live Somaliland and it's people.
Lets research who is writting all these article for Somalilandpress. This website is design by someone who is not measuring what cost or value the news they post is affecting the country. I advise the the owners of this web to revisit what was your vision when you start this website. Which I am thinking your orignal goal of this website was to deliver honest news to the people of somaliland and other people who would like fellow somaliland news. please take full ownership your website and the more you do the more we can trust you. Somaliland is in the urge of recognition and some of the news that i read from this website quetion me who are the owners? what is their goal?,
That is my thought.
Mr. Oday
I for one have found this website SomalilandPress to be unbiase when it comes to coverage of Somaliland news and current issue. So why don't we support sites like Somalilandpress rather than judging all the Somaliland media outlets the same. SomalilandPress is the only Somaliland website that has in Google it's headquarter office "Hargeisa,Somaliland". Also as we know there are so many websites that are being operated by the enemies of Somaliland that put false news/image of Somaliland in Google News. SomalilandPress is doing very in putting out a positive image of Somaliland to the world. Let us give credit when credit is due.
Thank you
Loyal visitor of SomalilandPress
Ahmed Warsame
Washington DC, USA
Pro. ali mazrui once said: Africa's future depends its dispora but i doubt whether somalilander's based abroad are objective enough because i see many who are complaining meadia outlets rather this regime whom eroded our image of abroad to the lowest level.
In my opinion, there is different between just news and news that have personal idea in it. It is the reader is responsibility to search and look for the correct news. Forexample, people see things differenly and that is oky. Two reporters who are reporting same news at the same time can be different when they are sending that same news. They may use different headers, grammers and news may have something to do with them personally instead of everyone else.
An example of this is like one reporter who is based in Somaliland but he only reports the bad news about the Government of Somaliland. One day another reporter sat with him and he asked him, brother don’t you have anything that is good to report about Mr. Riyale and Udub. XITAA IRBAD DUNLAGAIYANA HANOQOTEE. His answer was that he is no friend of Mr. Riyale and went on telling something that happened between him and Mr.Riyale
He was honest man but he lost his readers becuase they found out it was personal attact rather than attack that need Somaliland to be better. My views are general and has not dirrected any Somali own websites.