The International Monetary Fund reached a staff-level agreement with the government of Maldives on Wednesday, agreeing to extend its co-operation programme with the government for a further three years.
The IMF mission, who have spent the last three days in Male' meeting government representatives, said the government's economic policies "will help stabilize and strengthen Maldives’s economy,"
"The [IMF] mission thus reached a staff-level agreement with the Maldivian authorities on a three-year economic program that could be supported by a new IMF lending arrangement... It is anticipated that an approved program would encourage key donors to contribute additional financial support," the IMF said in a statement Wednesday.
The IMF praised the government's recent package of economic and financial reforms, which include proposed increases to Tourism Goods and Services Tax, a general GST and the implementation of income tax for high earners. To help reduce the bloated government wage bill, the government has also introduced a package of benefits for civil servants who leave government service.
Commenting on the IMF's decision today, Press Secretary Mohamed Zuhair said: "The agreement reached with the IMF today is a vote of confidence in the government's handling of the economy. We inherited huge amounts of debt and millions of dollars in unpaid bills from the former administration but have nevertheless managed to cut the budget deficit in half, bring down inflation and raise government income to put our economy on a steady path to prosperity."
The agreement reached with the IMF this week remains subject to review by IMF management and approval of the IMF’s Executive Board, which could consider a program request from Maldives in July.