The International Monetary Fund (IMF)'s Article IV report for 2022 highlights that one of the top priorities to stabilize the Maldives' economy is to address its debt crisis.
This is the first time since 2019 that the IMF has released its "Article IV" report. Last Saturday, the agency issued its 2021 and 2022 reports on the Maldives economy as well. The report had not been released earlier due to a lack of government approval. Therefore, the IMF reports have not been published since then. The general practice is to publish the article report at the end of the year.
According to the IMF, the Maldives should prioritize cost reduction to address the country's debt crisis. The government has been urged to formulate a plan prioritizing the implementation of projects. Additionally, the IMF emphasized the importance of including targets for subsidies in the plan.
The IMF commended the rapid recovery from the economic crisis induced by Covid-19. However, the agency emphasized the need to concentrate on enhancing the fiscal situation in the country. It also highlighted the importance of reducing the nation's reliance on tourism and fostering growth in other sectors of the economy.
The IMF highlighted the necessity for reforming state-owned companies and reducing expenditures. The report from the previous year suggested that the Maldives should identify revenue opportunities in the medium term and prioritize new avenues for revenue generation.
The IMF has urged the Maldives to place utmost priority to foreign exchange reform. Additionally, it emphasized the need to find ways to cease the practice of printing money to alleviate the strain on the country's reserves.