Cover -- Contents -- Abbreviations and Acronyms -- Executive Summary and Issues for Discussion -- I. Recent Developments -- II. Program Performance and Outlook for 2006 -- III. Economic and Financial Policies for 2007 -- A. The Macroeconomic Outlook -- B. Fiscal Policy and Reforms -- C. Monetary and Exchange Rate Policy -- D. External Sector Policies -- E. Public Enterprise Reform -- IV. Program Monitoring and Targets -- V. Risks -- VI. Staff Appraisal -- Figures -- 1. Percent Contribution to Real GDP Growth at Factor Cost -- 2. Consumer Price Index, January 2003-September 2006 -- 3. Real and Nominal Effective Exchange Rate and Relative Prices, January 2003-September 2006 -- 4. Inflation, Broad and Reserve Money, 2003-2006 -- Box -- 1. Progress in Public Financial Management -- Text Table -- 1. Fiscal Indicators, 2006-07 -- Tables -- 1. Selected Economic and Financial Indicators, 2004-08 -- 2a. Government Financial Operations, 2004-08 (Billions of Ariary) -- 2b. Government Financial Operations, 2004-08 (Percent of GDP) -- 3. Quarterly Government Financial Operations, 2006 -- 4. Balance of Payments, 2004-08 -- 5. Monetary Survey, 2005-08 -- 6. Balance Sheet of the Central Bank (BCM), 2005-08 -- 7. Bank Soundness Indicators, end-of-period, 2003-June 2006 -- 8. Sources and Uses of Resources, 2004-08 -- 9. Millennium Development Goals -- 10. Fund Position and Indicators of Fund Credit, 2006-10 -- Appendices -- I. Attachment I: Letter of Intent -- Attachment II: Memorandum of Economic and Financial Policies for 2006-07 -- Attachment III: Technical Memorandum on Monitoring the December 2006 and 2007 Targets for the Program Supported by the Arrangement Under the Poverty Reduction and Growth Facility (PRGF) -- II. Relations with the Fund -- III. Relations with the World Bank -- IV. Statistical Issues.