The International Monetary Fund (IMF) on Wednesday welcomed the Maldives’ economic reform agenda but urged the island nation to swiftly implement the austerity measures to improve its current fiscal and debt distress.
The IMF team currently visiting the Maldives had briefed the Parliamentary Finance and Economic Affairs Joint Committee on its findings and observations on Maldives’ key economic developments.
IMF Mission Chief Piyaporn Nikki Sodsriwiboon said Maldives’ economy is expected to grow by five percent this year primarily fueled by tourism growth further boosted by the imminent opening of the new passenger terminal of the Velana International Airport (VIA).
However, she warned that the delay in implementation of the economic reforms would cause both external and internal pressures and risks on the country's fiscal and debt sustainability.
So she repeatedly urged the government to accelerate the implementation of the measure outlined in the economic reform agenda.
Piyaporn particularly highlighted reforms to subsidies, state-owned enterprises, the public health insurance scheme (Aasandha) and reprioritising capital spending as significant steps towards a more resilient economy.
"The difficulties facing Maldives have been coming for years. This is not just one thing. The first step towards overcoming such difficulties is to recognise that there is a problem and come up with a plan to overcome them,” she said welcoming the initiative taken by this Administration for fiscal reform.
During the sit-down, most committee members urged the IMF to provide the necessary expertise and assistance to assist the government in navigating out of the present economic difficulties.
Some opposition lawmakers accused this Administration of dragging out the implementation of the measures, Piyaporn said the IMF believes that the incumbent government is committed to the fiscal reform agenda, but insisted that the implementation must be accelerated.
The Ministry of Finance and Planning meanwhile, has set up a special division to strengthen public finances, reduce expenditure, increase revenue and implement fiscal reforms.