In a surprising divergence from the lived experience of many citizens, President Solih of Maldives has asserted that the living cost in the island nation has not risen. During a campaign rally at M.Mulak, he went on record to state that the prices of goods and services are lower than before, a result of what he termed as 'ingenious' government policies.
The President challenged claims by the opposition, dismissing allegations of rising inflation in Maldives and emphasizing the government's achievements in maintaining low living costs.
However, there is an observable discrepancy between the President's claims and the actual economic state of the nation. Over the past few years, the living cost in the Maldives has noticeably increased, caused by a variety of interlinked factors.
Earlier this year, the government decided to raise the Goods and Services Tax from 6% to 8%, resulting in an immediate hike in the prices of goods and services. This has invariably added strain to the budget of Maldivian households and contradicts the President's assertion of lowered costs.
Compounding this, the Maldivian government's decision to print additional Rufiyaa following the suspension of the Fiscal Responsibility Act has led to an excess of money in circulation. This increased supply has devalued the national currency, causing the black market exchange rate to rise sharply, reaching MVR 17.80 per US dollar.
The devaluation of the Rufiyaa and the consequent high exchange rate pose severe implications for a nation like Maldives, which is heavily dependent on imported goods. As the scarcity of dollars increases, the cost of importing goods also rises, leading to higher prices for consumers.
The opposition argues that President Solih has been making unfounded claims throughout his campaign trail. They insist that his disregard for the economic realities faced by the populace are out of step with the experiences of everyday Maldivians.