Maldives: 2009 Article IV Consultation: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Maldives
IMF Staff Country Reports, January 29, 2010
Source details
- Canonical URL
- Maldives: 2009 Article IV Consultation: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Maldives
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Bibliographic details
- Published: January 29, 2010
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451825534.002
Key findings and assessment
- The Maldivian economy is facing large external and fiscal imbalances.
- Imbalances result from the severe impact of the global financial crisis and are exacerbated by an unsustainable fiscal expansion.
- The global crisis led to:
- sharp declines in tourism and related investment,
- sharp declines in other net capital flows,
- sharp declines in exports.
- These external shocks caused a significant fall in fiscal revenue while public spending increased substantially, pushing the economy into recession.
- A rising share of the resulting fiscal deficit has been financed by monetization.
Economic developments highlighted
- Tourism and related investment experienced sharp declines following the global financial crisis.
- Other net capital flows and exports also declined sharply, contributing to the external imbalance.
- The combined effect of falling revenues and higher public spending produced a recessionary outcome.
Fiscal dynamics and financing
- Fiscal revenue fell significantly as a result of the external shock.
- Public spending had increased substantially prior to or during the crisis, described as an unsustainable fiscal expansion.
- A growing portion of the fiscal deficit was financed through monetization.
Thematic tags and focus areas (as provided)
- Subject: Civil service, Expenditure, External debt, Fiscal consolidation, Fiscal policy, Foreign exchange, Labor, Public debt
- Keywords: Civil service, CR, debt service, deficit, financing, Fiscal consolidation, GDP, Global, government, IFC assistance program, IMF facility, ISCR, Maldivian economy, policy support
Maldives: 2009 Article IV Consultation: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Maldives