This is 24.44 million Special Drawing Rights (SDR) or 31.9 million dollars, which is part of the IMF’s Extended Credit Facility (ECF) agreement.
The financing “brings the total disbursed funds to approximately $159.7 million” and will make it possible to “cover external and budgetary financing needs”. The IMF estimates that the country’s growth this year “should stagnate at 4.2% from last year’s 4.3%”.
“Average annual inflation is expected to increase to 9.8%, fueled by rising international oil and food prices. Slowing growth and rising commodity prices will weigh on the budget, widening the budget deficit,” the Bretton Woods Institute explains.
Climate shocks, covid-19, global inflation, etc., explain the current situation of areas of uncertainty in Madagascar. However, according to the IMF, “Project Emergence is the implementation of the planned reform program in Madagascar and the increase in investments will stimulate production and growth”.
“Improving the budget is critical to increasing the effectiveness of fiscal policy and achieving program objectives,” said Antoinette Sayeh, IMF Deputy Managing Director and Acting President.
In the current climate of rising food and fuel prices, he suggests, it is critical to improve social spending and put in place stronger safety nets to protect the most vulnerable.
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