President Ibrahim Mohamed Solih stated on Wednesday that Maldives is "well-positioned to begin a strong economic recovery" from the COVID-19 pandemic.
The president expressed his optimism during the inaugural meeting of the National Taskforce on Resilience Building and Economic Recovery held at the President's Office.
President Solih highlighted the country's swift advancement in enhancing its healthcare capacity and resources to combat COVID-19 within a short period, thereby being able to reach a point where authorities are preparing to reopen borders this coming July.
Despite the developments, he also acknowledged the fiscal and economic repercussions on local businesses and individuals due to the pandemic. Noting that the state revenue is expected to decline by USD 1 billion this year, President Solih urged to revise the state budget and for relevant stakeholders to research and propose means of increasing revenue.
During the meeting, the discussions centred on the Taskforce’s efforts, across its three subgroups, to help the country recover from the social and economic impacts of the coronavirus, and enhance resilience.
The Taskforce's working group on finance, working group on economic recovery, and working group on the social sector gave presentations detailing their strategies and work to help Maldives' overcome the strain on the state budget, revive the economy, and prepare the health and social sectors for future crises.
The groups also outlined the ‘new normal’ under which Maldives is easing the restrictive measures implemented to contain COVID-19, to resume the operations of businesses and preparations to reopen schools.
The Ministry of Tourism also shared guidelines on resuming the tourism industry, which is set to restart in July when Maldives opens borders again.
The decisions on the proposals and suggestions of the Taskforce's working groups and the Tourism Ministry are to be announced at the next meeting.
In April, the World Bank estimated that Maldives will be the worst-hit country in the South Asian region, in the ensuing economic regression caused by the pandemic. The island nation was listed as one of the three countries that will see negative growth in the region, with GDP output estimated to contract by as much as 13 percent.
Meanwhile, the Ministry of Finance projected that the state deficit would reach MVR 13 billion this year compared to the MVR 5.9 billion originally stated in the 2020 State Budget, as a result of economic repercussions caused by the COVID-19 pandemic. The ministry also projected that the total state debt sans guarantee would increase to MVR 70 billion, which accounts for 86.6 percent of Gross Domestic Product (GDP). An overall 115 percent drop is projected in the GDP, along with 81.3 percent for nominal GDP.
In a bid to counteract the financial impact of the COVID-19 pandemic on the local economy, Maldives government introduced an economic relief fund with MVR 2.5 billion intended to prevent the closing down of local businesses and the loss of jobs.
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