The International Monetary Fund (IMF) Executive Board has granted the 30th request for emergency financial assistance to help its member countries address the challenges posed by COVID-19 by approving USD 28.9 million disbursement.

The global pandemic is inflicting significant damage on the tourism activity of the island nation and is expected to result in substantial weakening of the Maldives’ GDP growth, balance of payments and the fiscal position.

The IMF approved funding is to be drawn under the Rapid Credit Facility (RCF) to help cover balance of payments and fiscal needs, stemming from the COVID-19 pandemic.

Following the Executive Board’s discussion of the Maldives, Mr. Tao Zhang, Deputy Managing Director and Chair, issued a statement saying that The COVID-19 pandemic is having a pronounced negative impact on the Maldivian economy and is expected to cause a significant growth contraction. Containment measures are adversely affecting domestic economic activity.

“The temporary stop of tourist arrivals, the main source of foreign earnings, has severely weakened the fiscal and external positions, giving rise to large financing gaps.”

In his statement, the Chair of IMF Executive Board said that the temporary fiscal accommodation is appropriate and the authorities will reprioritize and cut capital expenditures, redirecting funds as needed to combat the pandemic and provide temporary and well-targeted support to the most vulnerable households and businesses, while maintaining high standards of transparency and governance.

He said that the Government of the Maldives acted quickly to put in place containment measures and is seeking support from the international community for its crisis response plan. The IMF financing will help to catalyze further assistance from the international community.