The combined impact of the domestic political crisis and high global prices for food and fuel has increased hardship for much of the population. The government's rice monitoring unit says the retail price of this basic staple has doubled over the past two years. In February prices for the staple had reached nearly AR2,000 (US$1)/kg in the capital, Antananarivo. Unemployment has risen, notably in the textile sector, which has suffered from the suspension of Madagascar's access to the US market access privileges under the African Growth and Opportunity Act. The squeeze on the public finances has also made itself felt, as the slowdown in capital spending has reduced work opportunities in construction.

A recent official survey of household incomes confirms the impact of these trends: 77% of Malagasy households lived in poverty in 2010, some 9 percentage points more than in 2005. The squeeze on public-service support is reflected in declining public services: net primary school enrolment fell from 83% in 2005 to just 73% in 2010, while the proportion of births attended by skilled health workers declined from 51% in 2006 to 44% in 2009. In 2008-10 non-wage and capital spending by the Ministries of Education and Health were cut sharply as these two departments concentrated resources on salaries, the bill for which rose rapidly, at the expense of maintenance and investment. The combined health and education wage bill climbed from AR352bn (US$207m) in 2008 to AR366bn the following year and AR440bn in 2010, according to data from the Ministry of Finance and the prime minister's office. Meanwhile, capital investment in health and education has slipped sharply, from AR67bn a year in 2008-09 to just AR19bn in 2010. Other non-wage spending rose, from AR168bn in 2008 to AR188bn the following year before plunging to AR139bn last year.