In this week´s radio address, President Mohamed Nasheed highlighted the the International Monetary Fund´s announcement of a staff-level agreement with Maldivian authorities on a new three-year economic programme that would be supported by a new IMF lending agreement.
The IMF reached agreement with Maldivian authorities during the IMF mission´s visit to the Maldives from May 10-24 to discuss economic policies that could be supported by a new financial agreement with the IMF.
The President said the government was encouraged by the new understanding with the IMF and the government on the new three-year economic support programme.
Approval of the programme would boost the international community´s trust and confidence in the Maldives and increase the opportunities for international investments in the Maldives, he stressed.
The President noted that the approval of the programme by the IMF´s Executive Board was conditional on the Maldives substantially increasing the state revenue.
The government was currently preparing new tax bills that would be proposed the next session of the People´s Majlis in order to increase government revenue through sustainable revenue streams and shape a modern economy, the President underlined.
The President urged the members of the People´s Majlis ¨to pass these bills and support the government to implement its proposed reforms.¨
He reiterated that additional revenue measures and expenditure reduction, which require the support and approval of the People´s Majlis, were necessary to reduce budget deficit.
¨This country´s and people´s development is linked to the revenue of the state,¨ he added.
President Nasheed, in his 99th weekly radio address, underscored the major findings of the IMF mission during their visit to the Maldives.
He noted that IMF mission, in their statement after the visit to the Maldives, supported the government´s proposed economic reforms stating that the government´s ¨proposed policy reforms will help stabilize and strengthen Maldives´s economy.¨
He said the IMF, despite stating that the country suffered from fiscal and external imbalances, noted that the economy was growing robustly.
¨In spite of having stated that Maldives faced challenges with regard to inflation, the IMF noted that there is no indication of rising inflationary momentum,¨ the President said recalling IMF mission´s statement.
Further, referring to IMF mission´s findings, he said the mission welcomed the government´s decision implement a managed float of the currency.
¨However, the government believes that tighter fiscal and monetary policies are necessary to support this [new exchange rate mechanism], continue economic growth and reduce inflation rate. The IMF also notes this,¨ the President added.
The staff-level agreement between the IMF mission and the Maldivian authorities remains subject to review by IMF management and approval of the IMF Executive Board, which could consider a programme proposal from the Maldives in July, reports the IMF mission in their statement.