The International Monetary Fund (IMF) has released its Article IV report for 2022, highlighting the urgent need for the Maldives to address its debt crisis as a top priority for economic stabilisation.
This marks the first release of the “Article IV” report since 2019. The IMF issued its reports for 2021 and 2022 on the Maldives economy last Saturday after a delay attributed to a lack of government approval. The reports were published after the usual end-of-year publication practice.
According to the IMF, the Maldives should focus on cost reduction to tackle the debt crisis effectively. The government is urged to formulate a comprehensive plan prioritising project implementation, emphasising incorporating subsidy targets.
While acknowledging the Maldives’ swift recovery from the economic impact of COVID-19, the IMF stressed the need to enhance the country’s fiscal situation. It emphasised diversifying the economy beyond tourism, reducing dependence on the sector, and promoting growth in other areas.
Reforming state-owned enterprises and implementing cost-cutting measures were highlighted as imperative steps. Building on recommendations from the previous year, the report suggests identifying medium-term revenue opportunities and focusing on new avenues for revenue generation.
Foreign exchange reform was deemed a top priority by the IMF, alongside a call to cease printing money to alleviate pressure on the country’s reserves. The report underscores the Maldives’ need to address these economic challenges promptly to ensure long-term stability.