In a report published at the end of July, S&P Global Ratings maintained Madagascar’s sovereign rating at B-. This update confirms that the country has continued its stabilization over the last six months.
Growth prospects remain favorable despite recent shocks. On July 27, 2026, S&P Global Ratings released a report assessing the country’s economic situation. The agency projects moderate growth that is expected to accelerate gradually. “GDP growth is expected to remain moderate at 3.1% in 2026, as the economy recovers from energy shocks in the first half of the year linked to conflicts in the Middle East, even though the suspension of automatic energy price indexing has limited their transmission to inflation,” the report indicates.
Over the past six months, the national economy has continued to absorb the effects of rising oil prices caused by Middle Eastern tensions. However, S&P warns that “persistent geopolitical volatility remains a downside risk.”
Following the passage of cyclones Fytia and Gezani, the country is engaged in a reconstruction phase, which is also expected to support growth. According to the agency, this will be driven by agriculture, the growing demand for nickel for electric vehicles, and reconstruction efforts. “Over the 2027-2029 period, GDP growth is expected to stabilize around 4%.”
The mining sector remains a key potential driver. S&P notes that it “has strong potential, but its performance remains volatile.” Nickel, crucial for the energy transition, still suffers from price volatility. The agency believes that “greater political stability could support projects and developments.”
Reforms have been initiated this year with the unfreezing of mining permits, which had been suspended for sixteen years. More than 1,600 files have been reopened under a clearer framework, providing for a 5% royalty and stability guarantees. Resilience factors also include foreign exchange reserves maintained at a satisfactory level, continued support from international partners for structural projects, and a public debt structure deemed favorable.
However, structural challenges remain. The agency highlights weaknesses related to governance, political stability, and the country’s high dependence on imports.
The current account deficit is on a downward trajectory, in a context marked by sluggish raw material exports (vanilla, nickel, cobalt), structurally high imports of food and fuel, and political instability affecting textiles and tourism, all exacerbated by the 2026 energy shocks. Profit repatriation by mining companies weighs on the income balance, while remittances from expatriates, representing 6% of GDP, provide an important counterweight. “In the long term, we anticipate stabilization thanks to improved exports and reduced energy import needs,” the agency estimates.
Political uncertainties remain a major risk factor. Combined with low per capita income, climate vulnerability, and high dependence on food and energy imports, they keep Madagascar in a fragile situation. “Madagascar’s long-term trajectory remains linked to political stability and the pace of reform implementation,” S&P concludes.
The government has announced several measures to redress the economy, including accelerating disbursements and the mobilization of public revenue, broadening the tax base through digitalization, reducing exemptions, fighting corruption, and applying the new mining code to secure investments. “Their implementation depends on the stabilization of the current political situation,” the agency emphasizes.
This assessment is the second review conducted by S&P Global Ratings between January and July 2026. Ratings remain unchanged after six months, with Madagascar maintaining a stable macroeconomic trajectory despite ongoing reforms and various shocks.
Captured & Published at: 2026-08-04 06:08:33 (Madagascar Local Time EAT)
Original Source: https://www.lexpress.mg/2026/08/notation-de-lagence-s-global-ratings-la.html
