Madagascar PPP Conversion Factor

Madagascar’s purchasing power parity (PPP) conversion factor rose dramatically from 83.59 in 1990 to 1,335.13 in 2025, marking the country’s all‑time peak and placing it 12th among 190 economies according to the World Bank. This 1,496 % increase over 36 years reflects sustained real‑exchange‑rate appreciation and structural shifts that have lowered the price of non‑tradable goods relative to the U.S. dollar. By contrast, peer economies such as Cambodia posted a conversion factor of 1,306.18 in the same year, while Colombia’s figure stood at 1,498.05, underscoring Madagascar’s relative progress within the group of emerging markets. The early 1990s trough coincided with severe balance‑of‑payments pressures and limited foreign investment, conditions that have since eased as macro‑policy reforms and infrastructure projects expanded domestic demand. If current reforms continue and external financing remains stable, the PPP conversion factor is likely to maintain an upward trajectory, further enhancing Madagascar’s comparative cost advantage.