The Ministry of Finance once again reverted to talking points on fiscal reforms, despite Moody’s downgrading the Maldives’ credit rating on 11 September, with Fitch having already done so weeks earlier on 29 August.
Moody’s downgraded the Maldives’ ratings due to high commodity prices, various financial challenges, difficulties in raising funds and delays in implementing fiscal reforms, the Finance Ministry acknowledged in a statement.
Noting that the nation is prepared to take necessary fiscal and debt management measures, the Ministry said the administration will look towards comprehensive reforms in its revenue and expenditure policies and implement measures to reduce borrowing in the medium term.
The Ministry said it hoped that such stringent measures would improve the situation and that the proposed efforts were supported by international agencies.
In addition, the administration has initiated reforms at state-owned enterprises (SOEs) and is confident the action will lead to measures which reduce expenditure, the Ministry said.
Implementation of the policies will help restore the state’s fiscal sustainability with the tourism sector, and the economy, expected to grow this year and in the medium term, the agency said.
Meanwhile, analysts and observers said the Ministry’s peripheral response, following two ratings downgrades in as many weeks, did not sufficiently bolster confidence in the nation’s current financial situation.
