Description |
1 online resource (73 pages) : color illustrations |
Series |
IMF country report ; no. 15/68 |
|
IMF country report ; no. 15/68
|
Summary |
KEY ISSUES Context. Maldives has rapidly grown into a middle income country, driven by tourism development. Over the past decade, the economy has experienced persistent fiscal deficits, occasionally accompanied by a widening current account deficit and pressure on the stabilized exchange rate regime. At the time of the previous Article IV consultation, official data pointed to large current account and fiscal deficits. Staff recommended policy action, combining fiscal consolidation, exchange rate devaluation and an incomes policy. Some fiscal policy actions were taken. The exchange rate parity was maintained. Recent economic developments. Two years on, the picture is different: a recovery in tourism is supporting growth; Maldives has performed well relative to peers; substantial data revisions paint less worrying picture of the external sector; and there is little pressure on the exchange rate. But the large and growing fiscal deficit remains the Achilles heel. Policy recommendations: Fiscal policy. Fiscal consolidation is necessary to ensure sustainability. The 2015 Budget contains helpful measures but they do not seem sufficient to bring debt ratios down. With limited policy buffers, the risks of fiscal slippages are high and the economy is vulnerable to external shocks. Staff advise greater fiscal adjustment through expenditure restraint to place the debt ratio firmly on a downward path. Strengthened public financial management is critical to support fiscal goals. Monetary, financial and external policies. Support from monetary and financial policies would help build buffers. The external position is highly uncertain given data issues, but on balance looks modestly weaker than implied by fundamentals and desirable policies and the exchange rate modestly overvalued. Medium term. Care needs to be taken to ensure that medium term policies do not add substantially to public sector expenditures, that infrastructure spending adds to potential growth and does not run into capacity constraints Data. Statistics should be further strengthened to assist policy decisions |
Notes |
"March 2015." |
|
"January 27, 2015"--Page 2 of pdf |
Bibliography |
Includes bibliographical references |
Notes |
Online resource; title from pdf title page (IMF Web site, viewed March 12, 2015) |
Subject |
International Monetary Fund -- Maldives
|
SUBJECT |
International Monetary Fund. fast (OCoLC)fst00556666 |
Subject |
Economic development -- Maldives
|
|
Fiscal policy -- Maldives
|
|
Monetary policy -- Maldives
|
|
Economic indicators -- Maldives
|
|
Economic development.
|
|
Economic history.
|
|
Economic indicators.
|
|
Fiscal policy.
|
|
Monetary policy.
|
SUBJECT |
Maldives -- Economic conditions
|
Subject |
Maldives.
|
Form |
Electronic book
|
Author |
International Monetary Fund
|
ISBN |
1498381618 |
|
9781498381611 |
|
1498349218 |
|
9781498349215 |
ISSN |
1934-7685 |
|