Friday
22nd Nov 2024
Dhivehi Edition
President Dr. Muizzu. | Photo: President’s Office
The International Monetary Fund (IMF) has said the government's decision to stop printing money is an important step to revive the economy.
The IMF said in a statement on its website today that Maldives’ economic growth will reach 5.2 percent this year as tourist arrivals increase. The IMF estimates that the economy grew by 4.2 percent last year.
The agency also predicted that the completion of the Velana International Airport expansion project and the opening of new resorts and guesthouses will further boost the economy. However, the IMF has identified the constraints on the economy and stressed the importance of formulating policies to mitigate these constraints.
They predicted that Maldives’ deficit and debt will remain high unless major reforms are introduced. It was also noted that Maldives is likely to face difficulties in repaying its external debt.
Further, the management of state-owned companies should be reformed to reduce the burden on the economy, and debt repayment and management procedures should be strengthened.
The government is taking good and strong measures in this regard, according to the IMF. They cited the reform of the subsidy system, the introduction of targeted subsidies to replace the existing subsidies in phases, the reform of Aasandha and the implementation of government development projects in a specific order, and the reform of state-owned companies.
The IMF said monetary policy, along with other policies, could play an important role in reducing macroeconomic vulnerability. However, the IMF has urged the government to strengthen financial sector supervision and shape monetary and spending policies to keep pace with the pegged foreign exchange rate.
Strengthening public governance, improving the business environment and increasing skills development are essential for sustainable and inclusive development, the IMF said.