IMF again calls to expedite implementation of fiscal reforms

International Monetary Fund (IMF) has yet again called on the government to expedite the proposed fiscal reforms, citing there is no time to wait.

An IMF delegation in the Maldives to assess its economic and fiscal state shared their findings during a joint meeting of Parliament’s Joint Committee on Public Accounts and Economic Affairs.

During the meeting, Head of Delegation Piyaporn Nikki Sodsriwiboon emphasized that the Maldives' tourism sector has been growing annually. She underscored several accomplishments from the previous year in the industry and expressed optimism for further progress this year, particularly with the new terminal at the main airport. She added that that growth would have a positive impact on the country’s economy.

Nevertheless, she stressed that the delay in the implementation of fiscal reforms is already too late. She warned that the debt deficit would further increase if the implementation of fiscal reforms is delayed any further.

The government has currently paused major infrastructure projects. The IMF delegation praised this decision, while advising that the priority should fall on matters absolutely required to uplift the country’s economic and financial situation. Delegation members said projects such as infrastructure projects should be executed in the most beneficial manner to the nation after taking into account the country's financial situation, regardless of the nation.

Another issue raised by the delegation is the reforms planned for the subsidy system. In this regard, Sodsriwiboon called onto implement the reforms at the earliest. She praised the amendments being made to laws at present to implement the resorts.

The delegation also praised the current administration’s policy on halting the printing of new bank notes.

According to Sodsriwiboon, the most important thing at present is to accept the financial woes faced by Maldives at present, adding the next step is to formulate a comprehensive plan to overcome the situation. Sodsriwiboon affirmed that the situation can be improved if the proposed plans are properly implemented.

Two international credit agencies decreased Maldives’ crediting rating last year. Moody's Ratings downgraded the Maldives' credit rating by one notch to Caa2, considered a high credit risk. Fitch downgraded the Maldives to ‘cc’, saying that dwindling foreign currency reserves posed a financial risk. As such, both the World Bank and IMF have also urged Maldives to expedite cost reduction measures on many previous occasions.

The Parliament has passed a projected state budget of MVR 56.6 billion for 2025 which includes MVR 11.5 billion in additional fiscal reform plans.