Madagascar is on watch negative by S&P because of increased political unrest
S&P Global put Madagascar’s “B-/B” ratings under watch on Friday, indicating that political unpredictability could hinder development, postpone efforts at fiscal reform, and limit access to outside funding.
“We think the political uncertainty will hinder policymaking and reform implementation in the near term, consequently weighing on investment, growth, and fiscal consolidation and possibly on debt service,” the ratings agency stated, opening a new tab.
On Friday, Colonel Michael Randrianirina, the leader of the coup, took the oath of office as president of Madagascar, days after his predecessor, Andry Rajoelina, was ousted by youth-led rallies and impeached by lawmakers after he fled overseas over the weekend.
If administrative continuity is maintained, the transition goes well, and access to official finance is maintained while Madagascar’s commercial debt obligations are being serviced, S&P stated that it may remove Madagascar’s ratings from “CreditWatch.”
S&P updated its real GDP growth projections for Madagascar from 4.1% to 3.0% on average for 2025–2026. It also predicted that the budget deficit would likely average 5.3% of GDP over that time, up from the previous estimate of 4.3%.
“In our view, donor support is key for reform implementation and cheap financing,” S&P stated.
Madagascar’s GDP per capita fell by over half between 1960 and 2020, according to the World Bank, making it one of the few countries to have gotten worse off during that time.
