The Maldives is capable of managing its economy, and fiscal policy, and does not need an intervention from the International Monetary Fund (IMF), Minister of Economic Development and Trade Mohamed Saeed has said in response to rumours circulating on social media that the country is facing serious financial troubles and is looking to the international financial institution for assistance.
Saeed laid blame for the country’s current financial struggle on the previous Ibrahim Mohamed Solih administration, accusing them of severely mismanaging the public finances. However, the current Mohamed Muizzu administration will implement a fiscal and economic reform programme to address shortcomings in a manner that will not require external involvement, he said.
“Maldives will not participate in any particular programme. It will not participate in any IMF programme. Maldives will do all that is needed to be done,” he said.
According to Saeed the social media rumours have been born, out of political frustration by certain elements, in an attempt to undermine the credibility of the nation’s fiscal approach.
“Maldives does not have to participate in a country specific program. The economic situation is improving faster than previously forecast,” the minister said in a post to social media.
Saeed said the economy will grow as steps are taken to overcome the current financial hurdles. The economy is growing at 5.5 percent and tourist arrivals are also increasing, as such the administration is confident that the economy will stabilise, he said.
The opposition Maldivian Democratic Party (MDP) Chairperson Fayyaz Ismail, in a post to social media, concurred with Saeed on the nation’s economy but unsurprisingly blamed the current administration for financial mismanagement, also calling out the nation’s current foreign policy approach.
“The country’s economy is in good shape. The challenge has always been the administration’s financial situation. Bilateral relations should be maintained without causing great inconvenience to the people. We can make do without going for an IMF program. We only have to go [to the IMF] if we don’t have the wherewithal to do what’s needed,” Ismail wrote in a social media post.
An IMF mission, which visited the Maldives recently, highlighted that fiscal and external vulnerabilities have increased and called on the administration to implement urgent policy adjustments. While Maldives’ post pandemic growth had been strong, it had recently normalised, with growth in 2024 projected, according to the IMF, at 5.2 percent even as tourist arrivals are expected to rise, the mission had noted based on its recent observations.
The Maldives’ debt currently stands at MVR 124 billion; well beyond a 100 percent of the nation’s productivity. According to economists and other technical experts, in addition to addressing the debt, sound fiscal policies should also look to reduce expenditure — measures to reform state subsidies, outlined in the budget, could yield favourable outcomes along such lines.
