An International Monetary Fund (IMF) mission, led by Ms. Piyaporn Sodsriwiboon, visited Malé from February 3 to 16, 2025, to assess the Maldives' economic situation as part of the 2025 Article IV consultation.
Ms. Sodsriwiboon stated that "thanks to the Maldives’ strong tourism base, growth has held up well." The real GDP growth is projected at 5 percent for 2025. She noted that the expansion of airport terminals would alleviate supply-side constraints in tourism and support sustained growth over the medium term. Inflation is expected to rise to 2.3 percent due in part to increased import duties. However, there is significant uncertainty around these forecasts with risks leaning towards a negative outcome.
The statement highlighted external vulnerabilities due to a large current account deficit and pressure on foreign exchange reserves. Fiscal deficits and public debt are anticipated to remain high, necessitating urgent policy adjustments. The Maldives faces considerable climate change risks such as sea level rise and natural capital degradation.
Ms. Sodsriwiboon emphasized that "the Maldives is navigating a pivotal moment" for restoring macroeconomic stability and debt sustainability. The government has embarked on fiscal reforms including ending exceptional use of advances from the Maldives Monetary Authority (MMA) and enacting new fiscal responsibility laws.
Revenue mobilization measures have been enacted but stronger fiscal consolidation is needed according to Ms. Sodsriwiboon's statement: "Holistic expenditure rationalization is necessary," alongside subsidy reforms aimed at targeted income transfers for vulnerable households as outlined in the 2025 Budget.
She also called for reprioritizing public sector investments and continuing reforms in state-owned enterprises and healthcare systems like Aasandha-healthcare reforms while strengthening public financial frameworks.
A coordinated tightening of policies could address macroeconomic vulnerabilities effectively with MMA resuming active monetary operations being seen positively by Ms. Sodsriwiboon who suggested readiness for further monetary policy tightening if inflationary or external pressures increase.
Given climate change threats faced by Maldives she stressed integrating climate sensitivity into public financial management processes along with structural reforms aimed at improving business environments expanding trade enhancing skills development crucially important sustaining robust inclusive growth
The IMF team expressed gratitude towards Maldivian authorities mentioning meetings held with Finance Minister M Zameer Governor A Munawar other senior officials private sector representatives development partners