The International Monetary Fund (IMF) has commended the Government’s efforts to strengthen the Maldives’ economy, particularly its fiscal reforms and measures to improve financial stability.

An IMF delegation met with the Public Accounts Committee of Parliament on Wednesday, where they acknowledged the positive impact of tourism expansion on economic growth.

According to the IMF, the Maldives’ economy is projected to grow by 5 per cent this year, a relatively strong rate compared to other similar economies. The country is also expected to receive over 2 million tourists in 2025, up from last year’s 2 million visitors.

The IMF noted that the completion of the Velana International Airport development project will further enhance economic growth and address existing challenges in attracting more tourists.

However, despite these positive indicators, the IMF also raised concerns over increasing economic pressures, particularly the rising fiscal deficit and external debt.

According to the IMF, major infrastructure projects in recent years have contributed to a sharp rise in Government debt and budget deficits, with debt levels exceeding 120 per cent of GDP by 2024. The IMF emphasised the need for policy changes to address these constraints, recommending a focus on essential infrastructure projects while reducing unnecessary spending.

The Government’s economic reform agenda was praised as a strong step towards fiscal sustainability, with the IMF highlighting recent GST reforms and revenue-increasing measures as critical steps to reducing deficits.

The decision to halt money printing was also commended, along with the ratification of the National Fiscal Responsibility Act and the National Debt Bill last year, which the IMF believes will strengthen financial institutions and improve public fund management.

The IMF stressed the importance of fully implementing economic reforms outlined in the national budget, stating that these measures are essential to address economic disparities and restore financial sustainability. The Government’s efforts to transition to targeted subsidies, reform state-owned enterprises, and reduce wasteful expenditure in Aasandha were also recognised as positive steps.

Additionally, the IMF noted that fiscal reforms introduced in the budget align with its own policy recommendations and reiterated its longstanding technical assistance to the Maldives since 2016 in managing public finances.

The organisation also advised that while infrastructure development remains important, the Government should prioritise the most essential projects and minimise wasteful spending to ensure long-term economic stability.