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Maldives: 2012 Article IV Consultation-Public Information Notice; Staff Report; and Statement by the Executive Director for Maldives
Author:
International Monetary Fund. Asia and Pacific Dept
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2019: Issue 283
Language:
English
Publication Date:
03 Sep 2019
DOI:
https://doi.org/10.5089/9781513512471.002
ISBN:
9781513512471
ISSN:
1934-7685
Pages:
61
Keywords:
ISCR; CR; deficit; Maldives economy; dollar; devaluation; exchange rate; MMA liability; targeted social assistance scheme; wage growth; financing climate; Imports; Tourism; Global; East Asia; South Asia; Europe
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This 2012 Article IV Consultation with Maldives discusses that fiscal position is weak, and its external reserves are critically low. The country has a long history of fiscal and external imbalances. Macroeconomic policies need adjustment. The authorities have taken important steps in the 2013 budget to reduce the fiscal deficit, but further consolidation is needed, both to ensure debt sustainability and to strengthen the balance of payments. That latter goal would be aided by devaluation, combined with a restrictive incomes and subsidy policy, which would address the current overvaluation of the rufiyaa and help to curb imports. Monetary tightening would help to prevent the need for a further devaluation. Financial supervision, particularly with regard to the state bank, also needs strengthening. Given the track record, a Staff Monitored Program could be the appropriate starting point for any renewed engagement, however, in order to begin discussions, there would need to be a clear commitment on the authorities’ part to implementing a comprehensive set of policy adjustments.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund