The International Monetary Fund (IMF) has expressed approval of the economic measures being taken in the Maldives. The members of the IMF delegation made the remarks during a meeting with the Parliamentary Committee on Public Accounts and the Committee on Economic Affairs.
During the meeting, the head of the IMF delegation Tidiane Kinda provided information to the parliamentary committee members on the economic situation of the Maldives and said that the economy will improve later this year. He noted the challenges faced by all countries due to high global inflation due to global price hikes following the Russia-Ukraine conflict. He said the government’s efforts to control prices using subsidies have kept inflation in the Maldives 3% lower than the global average. He, however, said global prices will keep increasing and the government needs to further decrease spending to compensate. He praised the decision to increase taxes and advised the government to target subsidies for those in need.
Furthermore, Kinda said the successful development of the tourism industry has allowed the Maldives to maintain a stable economic outlook while noting that the country was able to adjust to the reduction in tourist arrivals from Ukraine by changing the source markets. He also predicted that tourist arrivals from Europe will further decrease due to the energy crisis and will impact the tourism industry in the Maldives. He commended the Maldives for being able to make a 95% recovery after the COVID-19 pandemic negatively impacted the tourism industry.
The IMF delegation predicted the Maldives will face more economic challenges in the near future and expressed concern over the growing debt and budget deficit. The delegation highlighted the increase in expenditure for state-owned companies and stated that some work should be delegated to the private sector.
The delegation is in the Maldives as part of efforts to gather information on the economic situation of its member states. During the meeting, parliamentarians had the opportunity to question the members of the delegation regarding the current economic situation.