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Risk of rising US Dollar, inflation in 2017

Fathmath Shaahunaz
14 November 2016, MVT 12:37
Eydhafushi MP Ahmed Saleem speaks at parliamentary session. PHOTO/MAJLIS
Fathmath Shaahunaz
14 November 2016, MVT 12:37

The deficit of the state budget proposed for the next year will result in rising US Dollar value and inflation, warned member of ruling Progressive Party of Maldives (PPM) and Eydhafushi MP Ahmed Saleem early Monday.

Speaking during the parliamentary debate over the proposed State Budget 2017, Saleem warned of the possibility that the exchange rate of US Dollar and Maldivian Rufiyaa may increase to MVR 18 per Dollar next year with subsequent increase in living expenses.

“This will be a great loss to us with the increase in inflation and living expenses. Hence, state expenditures should be decreased,” he urged.

However, he praised the finance ministry’s decision to reduce government expenditures in the state budget, stating that finance minister Ahmed Munawar is working to minimize deficit. Declaring his full support for Minister Munawar’s effort to reduce state expenditures, Saleem said that developmental projects should be the ones to increase instead of the budget.

“It is a mandatory obligation for the president to reduce state expenditures and ensure that government expenses are done appropriately,” he said.

Saleem also urged to find and take action against people who spread corruption and conflict within the state. He added that not every critic is an enemy, but rather trustworthy individuals.

“The enemies are who will praise wrongdoings, they are not loyal. That is deceiving the president to take illicit advantage. Thus, I call on the president to be wary of such people.”

The 2017 State Budget of MVR 26.8 million proposed to the parliament on Tuesday projects a revenue of MVR 21.9 billion, with MVR 14.1 billion from taxes, MVR 4.8 billion from other income, MVR 878 million from free financial aid and MVR 2 billion from proposed revenue generating projects. Meanwhile, next year’s deficit is estimated to be MVR 303.7 million, which is five percent of the Gross Domestic Product (GDP).

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