Kaldor's indicators tested by Malagasy political crises: evolution of macroeconomic balances after 1991, 2002 and 2009, and a post-2025 projection

Abstract

This article examines the evolution of Madagascar’s macroeconomic balances through Kaldor’s indicators. The study focuses on the political crises of 1991, 2002, 2009, and 2025. These shocks have systematically distorted key indicators: GDP growth often turned negative, reaching -12.4%; inflation remained volatile, peaking at 40%; low unemployment masked widespread underemployment; and persistent current account balance deficits hovered around -18% of GDP. Inspired by authors such as Rodrik (1999) and Acemoglu and Robinson (2012), the analysis highlights institutional vulnerability, dependence on international aid, and the fragility of rent-based products and the climate. For 2025, projected growth of 3.8% and inflation around 8% point to a fragile recovery, with the risk of stagnation if the political transition drags on. Indeed, several measures — though not exhaustive — should be taken, including greater openness in seeking financial partners, incentive-based taxation, and the attraction of foreign investors, among others. These elements could stimulate production, job creation, and help reduce the widening deficit.

Keywords: GDP, Inflation, Unemployment, Current Account Balance.