President Ibrahim Mohamed Solih on Wednesday announced the decision to defer lease payments for resorts for the upcoming six months, as a relief measure to cushion the economic blow due to the COVID-19 pandemic.
In an address to the nation regarding the COVID-19 situation, President Solih revealed the government's intention to reopen its main Velana International Airport (VIA) and plans to kickstart the economy by resuming tourism industry operations in July of this year.
Speaking about the economy, the president further outlined plans to revive other economic sectors, including plans to offer similar relief options for farmers.
“The government has also decided to defer rent payments for islands leased for agricultural purposes for the next six months”, said the president.
He also declared plans to defer rent payments for land plots leased out by the finance ministry, by a similar 6-month period.
Noting that economic stimulations requires new ways of thinking, President Solih highlighted the importance of adopting an environmentally friendly lifestyle and ensuring a decent standard of living for migrant workers as the country worked to overcome the impact of the pandemic.
Underscoring the timing as an opportunity to rebuild the economy, President Solih stressed on the importance of prioritizing public health and adopting a frugal lifestyle as we move forward.
Meanwhile, the World Bank in mid-April estimated that Maldives will be the worst-hit economy in the South Asian region due to the pandemic. As over 70 percent of the country’s GDP is attributed to revenue generated by the tourism industry, Maldives’ economy continues to face severe repercussions due to global travel restrictions imposed over the COVID-19 outbreak.
Estimates show that the country will face a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency, while projected state deficit would reach MVR 13 billion this year.
In a bid to counteract the economic impact of the COVID-19 pandemic on the local economy, Maldives' government introduced a financial relief package with MVR 2.5 billion intended to mitigate the closing down of local businesses and the loss of jobs.
As part of the government's economic recovery plan to minimise the negative financial impact, Bank of Maldives (BML) has agreed to push back its loan repayment period by six months, along with a 20 percent discount on repayment amount, while Housing Development Finance Corporation (HDFC) and SME Development Finance Corporation (SDFC) also extended loan repayments by six months.