November 16, 2017
Maldives’ economic growth has been highly volatile, driven primarily by high-end tourism and construction.
", "publishDate": "2017-11-16", "sections": [ { "heading": "Economic performance and recent developments", "content": "- Growth drivers: \"high-end tourism and construction.\"\n- Real GDP growth:\n - 2014: 7.6\n - 2015: 3.3\n - 2016: 3.9\n- 2016 inflation (period average): 0.8\n- Fiscal outcome:\n - Fiscal deficit widened in 2016 driven by lower-than-expected revenue and large arrears clearance despite unchanged current spending.\n - Public debt as a share of GDP rose nearly 11.5 percentage points from 2014-16.\n- Monetary and financial conditions:\n - Monetary policy remains accommodative.\n - Private sector credit has grown rapidly, led by the housing and construction sectors.\n- External sector:\n - Current account deficit: widened sharply to 19.6 percent of GDP in 2016, driven by increased infrastructure-related imports, moderating tourism receipts, higher remittance outflows, and a large one-off court mandated payment." }, { "heading": "Outlook and risks", "content": "- Near-term outlook: strengthening recovery in the near term with low inflation and loose financial conditions.\n- Growth projections and drivers:\n - Growth projected to recover in 2017 and stabilize over the medium term, benefiting from infrastructure scale up, continued recovery in Europe, and favorable tourism trends.\n- Deficits and debt trajectory:\n - Both fiscal and current account deficits projected to gradually decline over the medium term after widening in 2016, as infrastructure spending winds down.\n - Main challenge: balancing a surge in infrastructure investment with the risks from high and increasing public debt.\n- Downside risks: significant downside risks from a fragile fiscal and external position." }, { "heading": "Executive Board assessment and policy recommendations", "content": "- Overall assessment:\n - Directors welcomed economic improvement supported by tourism and construction and a positive medium-term outlook.\n - Directors noted rapid buildup in debt, widening current account deficit, and low international reserves amid limited policy space.\n- Fiscal policy priorities:\n - Decisive fiscal adjustment needed to restore fiscal and debt sustainability and reduce external imbalances.\n - Consolidation should focus on implementing revenue measures, containing current spending, and prioritizing investment projects.\n - Encourage careful assessment of risks of excessive debt linked to infrastructure investment.\n - Welcomed intention to introduce user fees for key infrastructure and steps to recover tax arrears.\n - Strengthen public financial management, including developing an annual borrowing plan as part of the approved medium-term debt strategy.\n - Encourage reliance on concessional financing.\n- Exchange rate, monetary, and financial policy:\n - Stabilized exchange rate arrangement viewed as appropriate.\n - Strong fiscal adjustment, combined with a tighter monetary stance and more flexibility in the pegged regime, could better support the peg and help build foreign reserves.\n - Recommended gradual tightening of the monetary stance so as not to impede credit in support of economic growth.\n - Welcomed efforts to foster financial inclusion and improve the regulatory environment.\n- Structural and climate-related recommendations:\n - Continue investments to address climate change, reduce congestion, and lower costs for basic services.\n - Structural reforms to expand investment in electricity generation, renewable energy, and waste management.\n - Integrate risk-reduction and disaster-response programs into the core budget and public investment planning.\n - Improve accuracy and timeliness of national statistics." }, { "heading": "Key statistics (selected figures from Table 1)", "content": "- Population (in 1,000; 2015): 348\n- GDP per capita (in U.S. dollars; 2015): 11,544\n- Quota (in million SDRs, Feb 2016): 21.2\n- Inflation (end-of-period) series:\n - 2014: 1.2\n - 2015: 1.8\n - 2016: 2.1\n - 2017: 2.2\n - 2018: 2.4\n - 2019: 2.6\n- Inflation (period average) series:\n - 2014: 2.5\n - 2015: 1.4\n - 2016: 0.8\n- Central government finances (percent of GDP):\n - Revenue and grants: 2014: 26.7; 2015: 27.7; 2016: 28.4; 2017: 28.7; 2018: 28.6; 2019: 28.3; 2020: 28.5\n - Expenditure and net lending: 2014: 34.1; 2015: 34.5; 2016: 38.7; 2017: 36.6; 2018: 35.7; 2019: 34.7; 2020: 34.3; 2021: 33.9; 2022: 32.9\n - Overall balance: 2014: -7.4; 2015: -6.8; 2016: -10.3; 2017: -8.0; 2018: -7.1; 2019: -6.3; 2020: -6.0; 2021: -5.3; 2022: -4.3\n - Overall balance excl. grants: 2014: -7.7; 2015: -7.8; 2016: -10.6; 2017: -8.2; 2018: -6.5; 2019: -6.2; 2020: -5.5; 2021: -4.4; 2022: -4.3\n - Primary balance: 2014: -5.1; 2015: -4.6; 2016: -5.8; 2017: -3.3; 2018: -2.6; 2019: -1.9; 2020: -0.9\n - Current primary balance: 2014: -0.1; 2015: 5.2; 2016: 6.3; 2017: 5.7; 2018: 4.9; 2019: 5.4; 2020: 5.8\n- Public and publicly guaranteed debt (% of GDP): 2014: 54.2; 2015: 56.9; 2016: 65.7; 2017: 69.4; 2018: 72.0; 2019: 73.5; 2020: 74.3; 2021: 73.2\n- Broad money (annual % change): 2014: 14.7; 2015: 12.3; 2016: -0.2; 2017: 9.6; 2018: 9.7; 2019: 9.9; 2020: 10.5; 2021: 10.6\n- Domestic credit (annual % change): 2014: 15.7; 2015: 19.5; 2016: 7.1; 2017: 7.8\n- Current account (percent of GDP): 2014: -3.2; 2015: -7.3; 2016: -19.6; 2017: -17.2; 2018: -17.0; 2019: -16.4; 2020: -14.3; 2021: -12.9\n- Tourism receipts (in nonfactor services, net, percent of GDP): 2014: 73.0; 2015: 63.9; 2016: 59.3; 2017: 59.2; 2018: 59.1; 2019: 59.4; 2020: 59.7; 2021: 60.0\n- Exports (percent of GDP): 2014: 8.1; 2015: 6.0; 2016: 6.6; 2017: 6.9; 2018: 7.2; 2019: 7.5\n- Imports (percent of GDP): 2014: -53.1; 2015: -47.2; 2016: -49.5; 2017: -52.5; 2018: -53.8; 2019: -52.8; 2020: -51.2; 2021: -50.4; 2022: -47.4\n- Income (net, percent of GDP): 2014: -9.6; 2015: -8.1; 2016: -8.6; 2017: -8.9; 2018: -9.2; 2019: -9.3; 2020: -9.5; 2021: -9.7\n- Current transfers (percent of GDP): 2014: -8.3; 2015: -15.0; 2016: -8.5\n- Capital and financial account (including e&o, percent of GDP): 2014: 10.1; 2015: 6.1; 2016: 17.4; 2017: 19.4; 2018: 18.0; 2019: 17.0; 2020: 15.3; 2021: 13.7\n- General government, net (percent of GDP): 2014: -0.5; 2015: 3.1; 2016: 3.5; 2017: 3.7; 2018: 3.4; 2019: 3.2\n- Banks and other sectors, net (percent of GDP): 2014: 6.7; 2015: 1.7; 2016: 4.1; 2017: 3.6; 2018: 6.8; 2019: -1.2; 2020: -2.2; 2021: 1.0; 2022: 0.6; 2023: -0.4\n- Gross international reserves (in millions of US$; e.o.p.) 2/:\n - 2014: 615\n - 2015: 546\n - 2016: 468\n - 2017: 564\n - 2018: 614\n - 2019: 645\n - 2020: 703\n - 2021: 751\n - 2022: 724\n- Gross international reserves (in months of GNFS imports): 2.7 (2014); 1.9 (2015)\n- Memorandum items:\n - GDP (in millions of rufiyaa): 2014: 56,867; 2015: 61,869; 2016: 65,310; 2017: 69,648; 2018: 74,349; 2019: 79,488; 2020: 85,446; 2021: 91,932; 2022: 98,913\n - GDP (in millions of U.S. dollars): 2014: 3,690; 2015: 4,015; 2016: 4,238; 2017: 4,520; 2018: 4,825; 2019: 5,162; 2020: 5,545; 2021: 5,966; 2022: 6,419\n - Tourism bednights (000'): 2014: 7,290; 2015: 6,977; 2016: 7,138; 2017: 7,460; 2018: 7,795; 2019: 8,154; 2020: 8,602; 2021: 9,076; 2022: 9,575\n - Tourist arrivals (000'): 2014: 1,205; 2015: 1,234; 2016: 1,286; 2017: 1,356; 2018: 1,417; 2019: 1,483; 2020: 1,564; 2021: 1,650; 2022: 1,741\n - Dollarization ratio (FC deposits in percent of broad money)3/: 2014: 53.8; 2015: 50.6; 2016: 47.73/\n- Sources cited in table: Maldivian authorities; and preliminary IMF staff estimates and projections based on the 2017 Staff Visit.\n\nPrepared by the IMF Communications Department, November 16, 2017.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Maldives and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/11/15/pr17443-imf-executive-board-concludes-2017-article-iv-consultation-with-maldives" } ], "bullets": [ "[Markdown version](/en/news/articles/2017/11/15/pr17443-imf-executive-board-concludes-2017-article-iv-consultation-with-maldives/index.md)", "[Structured JSON version](/en/news/articles/2017/11/15/pr17443-imf-executive-board-concludes-2017-article-iv-consultation-with-maldives/index.json)", "[Bundle manifest](/en/news/articles/2017/11/15/pr17443-imf-executive-board-concludes-2017-article-iv-consultation-with-maldives/bundle-manifest.json)", "Published: November 16, 2017", "Growth drivers: \"high-end tourism and construction.\"", "Real GDP growth:", "2016 inflation (period average): 0.8", "Fiscal outcome:", "Monetary and financial conditions:", "External sector:", "Near-term outlook: strengthening recovery in the near term with low inflation and loose financial conditions.", "Growth projections and drivers:", "Deficits and debt trajectory:", "Downside risks: significant downside risks from a fragile fiscal and external position.", "Overall assessment:", "Fiscal policy priorities:", "Exchange rate, monetary, and financial policy:", "Structural and climate-related recommendations:", "Population (in 1,000; 2015): 348", "GDP per capita (in U.S. dollars; 2015): 11,544", "Quota (in million SDRs, Feb 2016): 21.2", "Inflation (end-of-period) series:", "Inflation (period average) series:", "Central government finances (percent of GDP):", "Public and publicly guaranteed debt (% of GDP): 2014: 54.2; 2015: 56.9; 2016: 65.7; 2017: 69.4; 2018: 72.0; 2019: 73.5; 2020: 74.3; 2021: 73.2", "Broad money (annual % change): 2014: 14.7; 2015: 12.3; 2016: -0.2; 2017: 9.6; 2018: 9.7; 2019: 9.9; 2020: 10.5; 2021: 10.6", "Domestic credit (annual % change): 2014: 15.7; 2015: 19.5; 2016: 7.1; 2017: 7.8", "Current account (percent of GDP): 2014: -3.2; 2015: -7.3; 2016: -19.6; 2017: -17.2; 2018: -17.0; 2019: -16.4; 2020: -14.3; 2021: -12.9", "Tourism receipts (in nonfactor services, net, percent of GDP): 2014: 73.0; 2015: 63.9; 2016: 59.3; 2017: 59.2; 2018: 59.1; 2019: 59.4; 2020: 59.7; 2021: 60.0", "Exports (percent of GDP): 2014: 8.1; 2015: 6.0; 2016: 6.6; 2017: 6.9; 2018: 7.2; 2019: 7.5", "Imports (percent of GDP): 2014: -53.1; 2015: -47.2; 2016: -49.5; 2017: -52.5; 2018: -53.8; 2019: -52.8; 2020: -51.2; 2021: -50.4; 2022: -47.4", "Income (net, percent of GDP): 2014: -9.6; 2015: -8.1; 2016: -8.6; 2017: -8.9; 2018: -9.2; 2019: -9.3; 2020: -9.5; 2021: -9.7", "Current transfers (percent of GDP): 2014: -8.3; 2015: -15.0; 2016: -8.5", "Capital and financial account (including e&o, percent of GDP): 2014: 10.1; 2015: 6.1; 2016: 17.4; 2017: 19.4; 2018: 18.0; 2019: 17.0; 2020: 15.3; 2021: 13.7", "General government, net (percent of GDP): 2014: -0.5; 2015: 3.1; 2016: 3.5; 2017: 3.7; 2018: 3.4; 2019: 3.2", "Banks and other sectors, net (percent of GDP): 2014: 6.7; 2015: 1.7; 2016: 4.1; 2017: 3.6; 2018: 6.8; 2019: -1.2; 2020: -2.2; 2021: 1.0; 2022: 0.6; 2023: -0.4", "Gross international reserves (in millions of US$; e.o.p.) 2/:", "Gross international reserves (in months of GNFS imports): 2.7 (2014); 1.9 (2015)", "Memorandum items:", "Sources cited in table: Maldivian authorities; and preliminary IMF staff estimates and projections based on the 2017 Staff Visit.", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[Maldives and the IMF](http://www.imf.org/external/country/MDV/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2017/11/15/pr17443-imf-executive-board-concludes-2017-article-iv-consultation-with-maldives/index.md", "json": "/en/news/articles/2017/11/15/pr17443-imf-executive-board-concludes-2017-article-iv-consultation-with-maldives/index.json", "bundleManifest": "/en/news/articles/2017/11/15/pr17443-imf-executive-board-concludes-2017-article-iv-consultation-with-maldives/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T21:21:41.242Z" }