S&P Global has placed Madagascar's 'B-/B' ratings on watch with negative implications on Friday, citing political uncertainty that could undermine growth, delay fiscal consolidation efforts, and restrict access to external financing.

"We think the political uncertainty will hinder policymaking and reform implementation in the near term, consequently weighing on investment, growth, and fiscal consolidation and possibly on debt service," the credit ratings agency said.

Coup leader Colonel Michael Randrianirina was sworn in as president on Friday, days after taking control of Madagascar in the wake of youth-led protests that forced out his predecessor, Andry Rajoelina, whom lawmakers impeached after he fled abroad at the weekend.

S&P said it could remove Madagascar's ratings from 'CreditWatch' if the transition is smooth, administrative continuity is ensured, and access to official financing remains, while it services commercial debt obligations.

S&P revised its real GDP growth forecasts downward for Madagascar to 3.0% on average over 2025-2026, from 4.1% previously and expects the budget deficit is likely to average 5.3% of GDP over 2025-2026, up from prior scenario of 4.3%.

"In our view, donor support is key for reform implementation and cheap financing," S&P said.

Between its independence in 1960 and 2020, Madagascar's GDP per capita plunged by nearly half, according to the World Bank, making it one of the few nations to have become worse off over that period.