The Maldives government is ready for a fiscal reform agenda but implementation of the program will begin "at the best time," Finance Minister Dr. Mohamed Shafeeq said yesterday.
As high government expenditure remains the biggest challenge to economic growth, international financial institutions have repeatedly been calling on the Maldives to reduce spending.
At a World Bank event held yesterday to officially release the "Maldives Development Update: Scaling Back and Rebuilding Buffers," Shafeeq said the government takes the fiscal reform agenda seriously. Reducing expenditure was in the government's hands and it needs to be done in a manner that would be the most beneficial for the country, he said.
"It is necessary to reform state companies. It can't be delayed. And there are leaks in Aasandha. The subsidies system as well needs to change to a targeted system," Shafeeq said.
The government is ready to enact the reform program and needs the cooperation of global financial institutions, Shafeeq said. The implementation of the measures will begin "at the right time," he said. The government has yet to announce a timeframe for implementation.
"The World Bank and IMF [International Monetary Fund] says the Maldives' reform program is hopeful. We don't want to take too little action too late. We're ready for this hopeful program," the Finance Minister said.
The medium-term fiscal strategy (2024-2026) devised by the previous government estimated savings of MVR 2.7 billion this year and more than MVR 12 billion over three years.
The World Bank projected economic growth of 4.7 percent for the Maldives this year. The IMF predicted that economic growth will slow down to 3.3 percent this year.
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.
