ADVERTISEMENT

World Bank Sees Rebound in Madagascar Growth in 2020

World Bank Sees Rebound in Madagascar Growth in 2020

(Bloomberg) --

Madagascar, the world’s biggest producer of vanilla, is forecast to grow at a slower pace this year as investments declined due to elections, before rebounding in 2020-2021, according to the World Bank.

“Growth continued apace in 2019, although moderating slightly to an estimated 4.7%, amid weakening external demand and a slow execution spending following presidential and parliamentary elections,” Marie-Chantal Uwanyiligira, country manager for Madagascar, said in a report published on the World Bank’s website.

Following a prolonged period of economic stagnation, growth accelerated over the last five years to reach 5.1% in 2018, its fastest pace in over a decade, the World Bank said. A post-election rebound in public and private investments is expected to result in growth averaging 5.4% in 2020-21, the bank said.

The Indian Ocean island nation has a population of 25.7 million, according to the Central Intelligence Agency’s World Factbook, but 75% of its people live on less than $1.90 a day and 80% live in rural areas.

The country witnessed a smooth transition of power in January, and the World Bank urged government to take advantage of the political stability to accelerate growth-enhancing reforms and develop fiscal buffers to support priority investments. Measures to increase domestic revenue mobilization and improve public sector efficiency are particularly important, Uwanyiligira said. “Creating a more transparent and predictable business environment would help foster new investments and boost productivity.”

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis at kbhuckory1@bloomberg.net

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net, Jacqueline Mackenzie, Andrew Davis

©2019 Bloomberg L.P.