The increase of the key interest rate to 12.5% has sparked concern among operators. For economist David Rakoto, this decision risks hindering access to credit and private investment.
The decision by the Central Bank of Madagascar (BCM) to raise its key rate to 12.5% comes as a cold shower for operators. It runs counter to the government’s objectives of reviving the economy, encouraging investment, and facilitating access to financing.
“The Central Bank’s rate hike raises a question: how can we reconcile the fight against inflation with the desire to stimulate economic activity?” asks economist David Rakoto, president of the Madagascar Economic Reflection Circle (CREM).
While the BCM is an independent institution, a higher key rate directly impacts the cost of bank loans and, consequently, investment decisions. In a context where the state is seeking to encourage national companies to invest more, the consistency between various economic policies becomes a critical issue.
“The problem is not just the level of the key rate, but its articulation with overall economic policy,” explains David Rakoto. He argues that any increase in the cost of money must be assessed by considering its effects on credit demand, investment, and the country’s production capacity.
This situation could particularly affect national operators, potentially leading them to postpone or scale back investment projects. Such a scenario would contradict the state’s goal of promoting national investment and fostering growth from the local economy.
The issue also arises regarding measures taken by the Ministry of Economy and Finance (MEF), such as the removal of Value Added Tax (VAT) on bank loans intended to reduce financing costs. If the cost of credit rises due to the key rate hike, the intended impact of these measures could be limited.
“We must look at the overall effect of measures rather than each decision in isolation,” emphasizes the CREM president. He concludes that the state needs its various economic policy levers to move in the same direction to successfully revive the economy.
Captured & Published at: 2026-08-11 06:08:46 (Madagascar Local Time EAT)
Original Source: https://www.lexpress.mg/2026/08/david-rakoto-la-hausse-du-taux.html
