Overview
The number of confirmed COVID-19 cases stands at 405 (2 deaths, 131 recovered) as of May 21, 2020. As of March 23, the government has declared a national state of emergency that has been extended several times (the last one through June 1) and adopted a range of measures to limit the spread of the virus including travel restrictions (on international flights and internal public transportation), a 15-day quarantine period for people in contact with the infected ones, a curfew in the three major cities between 8PM and 5AM, closure of schools and public offices (except for critical public services), a ban on public gatherings, and increased testing. Facing a severe impact from the global pandemic, the economic activity has contracted significantly in the first quarter of 2020. The authorities’ immediate priority is to ensure the health of the population and preserve macroeconomic stability. Following the activation of their national contingency plan, the authorities are beginning to take measures to increase health spending, help the most vulnerable, support the private sector, and preserve the stability of the financial sector.
Official Resources
No data
Travel Restrictions
All flights to Madagascar are suspended.
Source : IATA Timatic
Economic Measures
Key Policy Responses
FISCAL
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Key measures include: (i) increased spending on epidemic prevention and control; (ii) cash-transfers and in-kind necessities to the poorest and those unemployed; and (iii) tax relief, suspension of government fees and waived social contributions. Accprding to World Bank estimates, support to social sectors could reach more than US$160 million (about 1.1 percent of GDP). Due to very limited resources, the authorities are actively seeking additional budget support from development partners, beyond what was already disbursed or committed. On April 3, 2020, IMF approved a disbursement under the Rapid Credit Facility (RCF) equivalent to $165.9 million to meet the large external financing gaps arising from Covid-19. On March 12, 2020, the World Bank provided a grant of $3.7 million to strengthen prevention against the COVID-19 pandemic, purchase materials and equipment, and train health workers. On April 2, 2020, the World Bank approved $100 million Development Policy Operation (DPO) for budget support to improve the human capital. The government is working on a revised budget law that will consider additional fiscal and support measures to be presented to parliament.
MONETARY AND MACRO-FINANCIAL
EXCHANGE RATE AND BALANCE OF PAYMENTS
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The authorities are maintaining the flexible exchange rate regime. Based on the latest available data, the central bank made some limited interventions (guided by an algorithm based on market movements), and the exchange rate depreciated by about 5 percent vis-à-vis US$ since the beginning of the year.
Source : IMF & WB
