“Maldives is spending beyond its means”: World Bank

The Maldives’ economy is at risk due to excessive state expenditure, the World Bank has warned in a new report.

The report titled “Maldives Development Update October 2013” (English) paints a dire financial picture, brought on by the Maldives pursuing untenable measures to finance the state budget.

Noted areas of excess include a high civil service wage bill, healthcare and electricity subsidies, and transfers to State Owned Enterprises (SOEs).

Short-term budget financing measures such as selling T-bills and printing money poses risks such as the devaluation of the rufiyaa, while unpaid bills could disrupt basic services such as electricity, the report warned.