Madagascar: A Competitiveness and Exchange Rate Assessment

32 Pages Posted: 1 Jun 2009

See all articles by Luc Eyraud

Luc Eyraud

International Monetary Fund (IMF)

Date Written: May 2009

Abstract

The purpose of this paper is to assess Madagascar's competitiveness in recent years, using both price and nonprice indicators and an exchange rate assessment of the currency. We estimate the distance between the equilibrium and the actual real exchange rates using three methods: the macroeconomic balance approach, the external sustainability approach, and the reduced-form equilibrium real exchange rate approach. These methods suggest that in the medium term the real exchange rate is only slightly overvalued. We also carry out a comparative analysis of nonprice indicators and find that Madagascar performs less favorably than its competitors on structural competitiveness.

Suggested Citation

Eyraud, Luc, Madagascar: A Competitiveness and Exchange Rate Assessment (May 2009). IMF Working Paper No. 09/107, Available at SSRN: https://ssrn.com/abstract=1408890

Luc Eyraud (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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