Infrastructure projects could ‘transform’ economy, but poses risks
A visiting IMF mission said today that the “unprecedented scale up in public infrastructure” – including the expansion of the international airport and construction of the Malé-Hulhulé bridge – could boost tourism capacity and prove transformation “if implemented successfully, together with supportive education and employment policies”. But substantial external borrowing could add to “already elevated public debt.”
17 Jan 2016, 9:00 AM
President Abdulla Yameen’s ambitious infrastructure projects could transform the Maldives’ economy in the long-run, but poses financing risks due to persisting fiscal deficits and high levels of public debt, the International Monetary Fund has said.
After concluding annual consultations with the government, a visiting IMF mission said in a statement today that the “unprecedented scale up in public infrastructure” – including the expansion of the international airport and construction of the Malé-Hulhulé bridge – could boost tourism capacity and prove transformational “if implemented successfully, together with supportive education and employment policies”.
But financing the projects could significantly add to fiscal risks, the IMF cautioned.
“The 2016 budget is expansionary, it includes substantial external borrowing for the mega infrastructure projects, adding to already elevated public debt,” reads the statement.
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