2024-08-07 06:16:43
The Central Bank of Madagascar published its economic situation note yesterday which highlights encouraging signs of recovery in the second quarter of 2024. According to the Economic Combination Survey carried out by the bank, the Synthetic Indicator of Enterprise Activities (SIE) reached 17.2%. , with gross domestic product (GDP) growth forecast at 2.4% for the quarter. This improvement is a turnaround compared to the previous year, when the IAE posted an alarming figure of -10.6% in the same quarter. It therefore appears that the growth dynamic is recovering, especially in the tertiary sector.
However, inflation remains a major concern for households. In June 2024, the inflation rate stood at 7.2%, a slight decrease from the previous months, but it was still considered high. The price of rice, a staple food, increased by 5%, while energy prices rose by 8%. Despite appreciation of the national currency, the ariary, against foreign currencies, this phenomenon did not have a significant impact on consumer prices, with a continuous increase in imported products. Corporate finance expectations suggest that core inflation of 7.8% could continue until the end of the year.
In the short term, the forecasts are optimistic, and the IAE is expected to be 19.8% for the third quarter of 2024. The Financial Reform Law 2024 expects GDP growth of 4.5% for the year. However, these results are highly dependent on price developments, exchange rates and seasonal fluctuations that may affect the various sectors. Forecasts from the Central Bank of Madagascar show year-on-year inflation of 8% at the end of the year, a figure that must be carefully monitored due to the impact it may have on household purchasing power.
Finally, the aim of the recent financial reforms, in particular the adoption of LFR 2024, is to optimize the use of income and to boost the execution of public expenditure. With growth forecasts of around 12.0% and foreign direct investment increasing, especially in the textile sector and graphite exports, Madagascar is at a crossroads in its economic development. Activating a public investment program will play a key role in injecting liquidity into the economy, which is vital to support this ongoing recovery and foster new opportunities for the private sector.
#lonely #promising #recovery #Central #Bank #reckons