The International Monetary Fund (IMF)'s Mission has released a statement, after concluding a visit to Maldives, stating that even though the country's economic growth is gathering pace, fiscal vulnerabilities remain high in the Maldives.

IMF's Mission led by Tidiane Kinda conducted a visit to Maldives to discuss recent economic developments, the outlook and the country's policy priorities, in June.

The Mission's statement said the Maldivian economic growth is gathering pace supported by strong recovery in tourism, and expected to yield a solid growth of 8.7% in 2022. However, the statement also read that fiscal deficit is expected to widen in the Maldives and remain in double digits in 2022.

Maldives economic outlook is subject to significant risks owing to economic slowdown in key source markets for tourism and tighter global financial conditions as per the Mission. The statement also noted state support to state-owned enterprises (SOEs) through subsidies and capital contributions for debt repayment as a key factor for fiscal vulnerabilities.

The Mission also noted that Maldives remains at high risk of debt distress, and requires further adjustments to policies. The statement noted the dollar shortages persisting in Maldives, contributing to declining international reserves in the country.

IMF Mission stated that the Maldives' ongoing economic recovery provides the country with a window of opportunity to implement critical reforms such as raising domestic revenue, rationalising public spending, and limiting non-concessional borrowing to secure fiscal and debt sustainability.