{
  "title": "Maldives: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Maldives",
  "publication": "IMF Staff Country Reports, June 10, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2019/06/07/maldives-2019-article-iv-consultation-press-release-staff-report-and-statement-by-the-46972",
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  "summary": "This 2019 Article IV Consultation discusses that growth in Maldives has been strong and is projected to remain so in 2019 driven by tourism, commerce, and construction.",
  "sections": [
    {
      "heading": "Growth outlook and macroeconomic projections",
      "content": "- Growth in Maldives has been strong and is projected to remain so in 2019 driven by tourism, commerce, and construction.\n- The outlook is for continued strong growth and moderate inflation.\n- As major infrastructure projects will gradually start to unwind, the current account deficit will begin to narrow.\n- Under the current policies, the fiscal deficit is projected to remain elevated.\n- Only a gradual improvement in fiscal and current account deficits is projected without policy adjustment."
    },
    {
      "heading": "Vulnerabilities and risks",
      "content": "- Maldives remains highly vulnerable with reduced policy space due to large and growing public debt and rising pressures on external stability.\n- High and rising public and external debt pose material risks to macroeconomic stability and external balances."
    },
    {
      "heading": "Policy advice and recommendations from the consultation",
      "content": "- Address external imbalances, including:\n  - restoring fiscal buffers;\n  - strengthening public finance management;\n  - reforming the exchange rate regime;\n  - building international reserves;\n  - improving governance;\n  - implementing structural reforms; and\n  - encouraging diversification.\n- Fiscal policy: successful implementation of tax reforms and improved tax administration, together with measures to contain budgetary spending, would result in a narrowing of both fiscal and current account deficits.\n- External policy: building international reserves and reforming the exchange rate regime were advised to mitigate pressures on external stability.\n- Governance and structural reforms: improving governance and implementing structural reforms to encourage diversification were emphasized to reduce vulnerability."
    },
    {
      "heading": "Key findings and implications",
      "content": "- The consultation concluded that policy measures combining revenue-side reforms (tax reforms and improved tax administration) and expenditure containment are necessary to mitigate the risks posed by high public and external debt.\n- Without these reforms, fiscal deficits are expected to remain elevated and current account adjustment will be gradual, leaving the economy exposed to external financing pressures.\n\n---\n\n Content in this bundle\n\n- Maldives — IMF staff report excerpt\n  - Maldives — IMF staff report excerpt (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Maldives — IMF staff report excerpt (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: June 10, 2019",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781498318723.002",
    "Growth in Maldives has been strong and is projected to remain so in 2019 driven by tourism, commerce, and construction.",
    "The outlook is for continued strong growth and moderate inflation.",
    "As major infrastructure projects will gradually start to unwind, the current account deficit will begin to narrow.",
    "Under the current policies, the fiscal deficit is projected to remain elevated.",
    "Only a gradual improvement in fiscal and current account deficits is projected without policy adjustment.",
    "Maldives remains highly vulnerable with reduced policy space due to large and growing public debt and rising pressures on external stability.",
    "High and rising public and external debt pose material risks to macroeconomic stability and external balances.",
    "Address external imbalances, including:",
    "External policy: building international reserves and reforming the exchange rate regime were advised to mitigate pressures on external stability.",
    "Governance and structural reforms: improving governance and implementing structural reforms to encourage diversification were emphasized to reduce vulnerability.",
    "The consultation concluded that policy measures combining revenue-side reforms (tax reforms and improved tax administration) and expenditure containment are necessary to mitigate the risks posed by high public and external debt.",
    "Without these reforms, fiscal deficits are expected to remain elevated and current account adjustment will be gradual, leaving the economy exposed to external financing pressures.",
    "**Maldives — IMF staff report excerpt**"
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