S&P Global Ratings confirmed Madagascar’s sovereign credit ratings at ‘B-/B’ on Friday, simultaneously removing the nation from CreditWatch with a negative outlook. The ratings agency assigned a stable outlook, citing improved political stability after last October’s military intervention.
The transition maintained administrative continuity, and Madagascar preserved punctual debt repayments throughout the period. A notable aspect of this transition is the sustained engagement of key international donors—such as the International Monetary Fund, World Bank, and French Development Agency—which is uncommon following such political disruptions.
The easing of political tensions is attributed to the ousting of the former president, who faced substantial youth-led protests triggered by outages in water and electricity supply, governance deficiencies, and corruption concerns. Colonel M. Randrianirina, head of the elite CAPSAT military unit, was appointed as the transitional leader with constitutional court approval.
The stable outlook balances Madagascar’s ongoing vulnerabilities, including its fragile political atmosphere, low GDP per capita estimated at $600 in 2025, budget pressures stemming from underperforming state-owned enterprises, and risks associated with climate change. These are weighed against steady foreign currency reserves, continued international donor support, and a government debt profile characterized by low cost and long maturities.
S&P forecasts Madagascar’s real GDP growth to gradually strengthen, reaching roughly 4% by 2028. This growth trajectory is expected to benefit from diverse sectors including tourism, information technology, agriculture, manufacturing, mining, and construction. Nonetheless, structural impediments such as susceptibility to natural disasters, critical infrastructure shortfalls, and governance weaknesses persist as challenges.
The current account deficit is projected to remain high, averaging nearly 6% of GDP between 2026 and 2029. Meanwhile, the budget deficit is anticipated to increase in line with improved fiscal execution. Despite these fiscal pressures, Madagascar’s government debt structure remains advantageous due to concessional financing provisions, which keep interest burdens manageable.
S&P noted conditions under which ratings could worsen, specifically if political unrest reemerges or liquidity strains arise from deteriorating fiscal positions. Conversely, upgrades remain possible should Madagascar manage to reduce its budget deficit beyond current expectations and enhance its external balances through export growth.