Anjali Sharma
GG News Bureau
WASHINGTON DC, 9th Feb. International Monetary Fund on Thursday warned that the Maldives is highly vulnerable to climate change risks, with potentially severe economic costs due to floods and rising sea level.
IMF said in a statement issued that without significant policy changes, the overall fiscal deficits and public debt are projected to stay elevated in the Maldives, even as the nation remains at high risk of external and overall debt distress.
It noted that the elevated fuel prices with strong import demands, the current account deficit in 2024 is projected to remain large, gradually narrowing over the medium term.
IMF said that the Maldives is highly vulnerable to climate change risks, with potentially severe economic costs due to floods and rising sea level.
The Maldives’ post-pandemic growth has been strong, but normalised. Growth is projected at 5.2 per cent in 2024, as tourist arrivals are expected to rise further, IMF reported.
IMF said the fiscal and external vulnerabilities have increased, calling for urgent policy adjustment.
It noted that a sustained fiscal consolidation, accompanied by tighter monetary and macroprudential policies is needed to reduce vulnerabilities and restore the sustainability of public finance and debt.
The authorities are taking a welcome step to develop an ambitious and homegrown fiscal reform agenda and are committed to urgently implement this, IMF stated.
IMF mission led by Piyaporn Sodsriwiboon who visited Male during January 23-February 6, 2024 to discuss the recent economic developments, the outlook, and the country’s policy priorities in the context of the 2024 Article IV consultation, according to a press release issued in New York.
