Implementation of a fiscal reform agenda devised by the government will be necessary to ensure sustainable economic growth, the World Bank has said.
The World Bank published this year’s “Maldives Country Update” yesterday. The report included an assessment of the country’s economic situation and projections for medium-term changes to the Maldivian economy.
“Implementing the government's fiscal reform agenda is essential to sustaining economic growth in Maldives. The World Bank remains committed to supporting Maldives in these reform efforts,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka.
The World Bank said the government has assured enactment of its economic agenda, including subsidy reform, strengthening state-owned enterprises, plugging holes in Aasandha and reordering capital investments.
The World Bank pledged support for establishing the mechanism needed for targeting subsidies and phasing out the current subsidy system.
“[The reform agenda] includes developing a targeted mechanism to support the poor and the vulnerable, phasing out the broad-based subsidy system that is currently inefficient, addressing weaknesses in state-owned enterprises, enhancing the efficiency of health spending, and improving the strategic planning of investments,” Faris Hadad-Zervos said about the World Bank’s expert advice to the Maldives.
President Dr. Mohamed Muizzu previously said that the International Monetary Fund (IMF) and World Bank have endorsed the current government’s economic manifesto.
The World Bank predicted that the Maldives economy will grow by 4.7 percent this year. The IMF estimated that economic growth will slow to 3.3 percent in 2024.
The Maldives Monetary Authority (MMA) predicted economic growth of 5.5 percent whilst the government expects the economy to grow by 6.7 percent this year.
