IMF Staff Completes 2026 Article IV Mission to the Maldives

IMF News, June 17, 2026

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IMF mission led by Ms. Piyaporn Sodsriwiboon visited Malé during June 4–14, 2026 to discuss recent economic developments, the outlook, and policy priorities in the context of the 2026 Article IV consultation.
End-of-mission press release (statement of IMF staff) conveys preliminary findings; views are those of IMF staff and do not necessarily represent the IMF’s Executive Board.
A staff report will be prepared based on the mission’s preliminary findings and, subject to management approval, presented to the IMF's Executive Board for discussion and decision.

Over the past year, the Maldivian economy showed resilience amid a challenging macroeconomic and financial environment.
A sizable fiscal consolidation effort through both revenue mobilization and expenditure controls was undertaken in 2025, which helped contain financing pressures.
Economic activity remained robust, supported by strong growth in tourism amid buoyant external demand.
Official bilateral support and increased international reserves mitigated near-term external pressures.

Spillovers from the conflict in the Middle East have weighed on economic activity, public finance, and the external position.
Projection: Weaker tourism activity and higher global energy prices would slow real GDP growth to about 1 percent in 2026.
Projection: Beyond 2026, growth is projected to recover in 2027 and would return to its potential of around 4 percent over the medium term.
Fiscal and debt outlook:
- Recent debt repayments alleviated immediate solvency concerns.
- The overall fiscal deficit and public debt are projected to stay elevated.
- The risk of overall and external debt distress remains high.
External sector: Driven by higher import bills, the current account deficit would widen further.
Downside risks dominate; external risks remain salient.
Financial stability: The sovereign–bank nexus remains elevated and, combined with other economic and policy settings, could pose macro-financial risks and constrain productive investment and growth.

Near-term priority: Recalibrate the policy mix to sustainably address macroeconomic imbalances, put debt on a downward trajectory, and maintain financial stability, while protecting the most vulnerable.
Restore fiscal and debt sustainability through credible, reform‑based consolidation that:
- Restrains spending—building on the efforts to streamline capital spending in 2025.
- Strengthens revenue mobilization.
Given the surge in global oil prices amid the Middle East conflict, conduct a systematic expenditure review of subsidy schemes to:
- Streamline costs.
- Target vulnerable groups using proxy means testing and strengthened administrative capacity and delivery systems.
Continue reforms to improve energy efficiency and transition to renewable energy to reduce future subsidy costs.
Address State-owned enterprise risks: stronger oversight and control are warranted.
Enhance the public financial framework to improve fiscal policy credibility and effectiveness.
Integrate climate sensitivity into public financial and investment management processes to enhance climate investments and unlock concessional climate financing.

The Maldives Monetary Authority (MMA) resumed open market operations; the IMF recommends continuing open market operations to tighten monetary conditions.
While the Foreign Currency Act helped alleviate foreign exchange liquidity pressures and build international reserves, decisive macroeconomic adjustments are key to preserving the exchange rate peg and restoring stability.
Vigilant oversight of the financial sector is essential.
Strengthen banking supervision and crisis management frameworks by upgrading central bank and financial sector laws and regulations to enhance financial stability and policy credibility.

Supply-side reforms are priorities to:
- Remove structural bottlenecks to growth.
- Strengthen human capital.
- Improve climate resilience.
Free trade and financial agreements with key bilateral partners are being advanced to help diversify sources of external demand.
Improve legal framework and governance to enhance the business climate and foster private sector development.

Meetings were held with Finance Minister H. Zareer, Governor A. Munawar, other senior officials, representatives from the private sector, and development partners.
The IMF team thanked the Maldivian authorities for their hospitality and constructive discussions.

Press Release No. 26/208 — June 17, 2026 — IMF Communications Department