Maldives remain at high risk of debt distress, warns IMF
Maldives faces challenges posed by high deficits and growing debt.
07 Mar 2019, 9:00 AM
Economic growth is expected to remain strong this year but the Maldives faces challenges posed by high deficits and growing public debt, a visiting International Monetary Fund delegation warned Tuesday.
Bolstered by “large investments in infrastructure, tourism and real estate,” the IMF predicted growth of 6.5 percent for 2019 but stressed the need to increase the economy’s resilience and manage large fiscal and external imbalances.
“A potentially good outlook provides an opportunity to address deep-seated structural weaknesses and sustain long-term growth,” Phillip Karam, who led the IMF staff team, advised in a statement issued at the conclusion of a two-week visit for consultations with local authorities.
The team echoed advice offered after previous consultations to mitigate risks associated with loans that financed the previous administration’s infrastructure scale-up, which included the expansion of the international airport, a 25-storey hospital tower, and the construction of a Chinese-funded bridge to connect the capital with a new urban centre under development on a reclaimed island.
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