President Mohamed Nasheed has informed the IMF that the government will continue with its programme to reduce public sector expenditure. He made these comments at a meeting with the IMF’s Deputy Director for the Asia Pacific Region Dr Kalpana Kochhar that was held at the President’s Office.

The President stated that the austerity measures that were put in place in September 2009 would remain in place. He noted that the government has an agreement with the Civil Service Commission to implement salary reductions in light of the extraordinary economic circumstances facing the country.

He expressed his confidence that the Civil Service Commission would not only honour its agreement with the government, but also give due consideration to the macroeconomic stability of the nation.

Both the government and the Civil Service Commission had agreed to a definition of the extraordinary economic circumstances, which would extend until revenue surpassed Rf.7 billion. Both parties are to review the economic data every three months with the next review scheduled to take place in April.

President Nasheed also discussed other aspects of the government’s economic programme with the IMF delegation. These discussions included the proposed reforms to the taxation system which is now being considered by the People’s Majlis.

Dr. Kochhar commended the President on the sound economic policies the government has pursued since taking office. She also reiterated the IMF’s support for the government’s manifesto programme.