A recent International Monetary Fund (IMF) report has outlined critical priorities for integrating climate change considerations into the Maldives’ public financial management (PFM) and public investment management (PIM) systems.

The report highlighted the vulnerability of Maldives to rising sea levels, coral bleaching, and flooding, stressing the need to prioritise public investments to address climate challenges within fiscal constraints.

While progress has been made in areas such as procurement transparency and project monitoring, the IMF identified significant gaps in climate-aware planning, project appraisal, and fiscal risk management.

To bridge these gaps, the IMF proposed five high-priority recommendations, including the introduction of climate budget tagging and statements to identify and report climate-related expenditures effectively. It further stressed the importance of conducting regular assessments of climate risks to infrastructure and long-term fiscal sustainability, alongside providing stronger central guidance for planning climate-sensitive investments.

Additionally, the report called for updated regulations to incorporate climate considerations into project appraisal and selection processes and advocated for improved asset management practices to account for climate impacts.

The IMF underscored that successful implementation of these recommendations will require enhanced capacity building, robust inter-ministerial coordination between the Finance and Climate ministries, and the development of new tools and methodologies.