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IMF commends Maldives' fiscal reform agenda, offers advice

Mariyath Mohamed
07 February 2024, MVT 14:39
Mariyath Mohamed
07 February 2024, MVT 14:39

The International Monetary Fund (IMF) has commended the Maldives for a number of actions taken to overcome the economic difficulties faced by the country. This includes the discontinuation of public account overdraw [printing money], reform of Aasandha healthcare provision, State-owned enterprises reform and restructuring of subsidies.

A mission from IMF visited the Maldives from January 23 to February 6 to discuss recent economic developments and policy priorities.

The provisional findings published after IMF concluded its visit to the Maldives states that the Maldivian economy expanded by 13.9 percent in 2022 and is estimated to grow by 4.4 percent in 2023. It further states that growth is projected at 5.2 percent in 2024, owing to to the expectation of increased tourist arrivals.

However, the IMF emphasized the risks and uncertainty involved, urging swift policy adjustments to address this.

"Without significant policy changes, the overall fiscal deficits and public debt are projected to stay elevated, and the Maldives remains at high risk of external and overall debt distress. Amid elevated fuel prices coupled with continued strong import demands, the current account deficit in 2024 is projected to remain large, albeit gradually narrowing over the medium term," the statement reads.

The statement ends with advising the Maldives to focus on improving the business climate, strengthening governance, and enhancing skill developments to encourage sustainable growth.

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