Maldives: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Maldives
IMF Staff Country Reports, May 31, 2016
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- Maldives: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Maldives
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Bibliographic details
- Published: May 31, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484356661.002
Key findings on recent developments and outlook
- Maldives living standards have risen to middle-income levels over the past two decades driven by tourism development.
- The real economy outperformed its peers in the past few years, but tourism slowed last year.
- The economy is highly exposed to climate change, which further adds to fiscal costs.
- The country’s geography creates fiscal challenges.
- The economy has faced persistent fiscal deficits over the past decade.
- Public debt is high and on a rising trajectory.
- A detailed national development strategy would ensure that investment plans are well coordinated and bring about bigger growth dividends.
Risks and vulnerabilities
- High and rising public debt increases fiscal vulnerability.
- Persistent fiscal deficits constrain policy space.
- Heavy exposure to climate change poses both economic and fiscal risks.
- Tourism slowdown directly affects growth and external balances given the sector’s central role.
Policy implications and recommendations
- Prepare and implement a detailed national development strategy to coordinate investment plans and enhance growth dividends.
- Address persistent fiscal deficits to stabilize public debt dynamics (specific fiscal measures are discussed in the full report).
- Build resilience against climate change to limit its fiscal and economic impact (detailed adaptation and financing approaches are addressed in the full report).
Subject tags and thematic scope
- Subject: Climate change, Economic sectors, Environment, External debt, Fiscal policy, Fiscal stance, Public and publicly-guaranteed external debt, Public debt, Tourism
- Keywords: Asia and Pacific, Climate change, CR, current account, deficit, Europe, exchange rate, Fiscal stance, GDP, Global, ISCR, Maldives economy, monetary policy stance, South Asia, staff's projection, Tourism, tourism activity, tourism arrival