Maldives: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Maldives
IMF Staff Country Reports, November 11, 2023
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- Maldives: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Maldives
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Bibliographic details
- Published: November 11, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400258633.002
Economic rebound and outlook
- Economic activity "rebounded strongly from the pandemic-induced contraction," supported by the authorities’ "decisive policy measures."
- Risks to the outlook are "tilted to the downside," including:
- "a possible sharp slowdown in key source markets for tourism,"
- "high commodity prices,"
- "tighter global financial conditions."
- Upside risk to growth: "A resumption of tourist arrivals from China."
Fiscal and external vulnerabilities
- Fiscal and external vulnerabilities remain elevated due to:
- "rising subsidies,"
- "high capital spending,"
- "an increased interest burden."
- The report calls for implementing "a comprehensive set of reforms to reduce fiscal, debt, and external vulnerabilities, and strengthen economic resilience."
Debt distress assessment
- The Maldives has "a high risk of external debt distress and a high overall risk of debt distress."
Inflation and subsidies
- "Inflation has risen but is relatively contained due to price subsidies."
Financial sector and stability
- The report recommends that "financial sector policies should remain vigilant to safeguard financial stability" because of:
- "the large exposure of the banking sector to the sovereign,"
- "the expiration of pandemic-related lending support schemes."
Policy recommendations and opportunity
- The ongoing economic recovery provides an opportunity to "swiftly implement a comprehensive set of reforms" targeting:
- fiscal consolidation and public financial management,
- government debt management and external debt reduction,
- measures to strengthen resilience against external shocks.
Source: Maldives: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Maldives
Content in this bundle
- 1mdvea2023002