Finance Minister Hassan Zareer said on Tuesday, 13 October, that the Maldives has asked international financial institutions for help to strengthen state reserves and carry out economic reforms, in an interview with an international news agency.
Zareer said the Maldives imports all of its oil, and that higher oil prices linked to unrest in the Middle East have tripled government spending on energy subsidies this year. He also pointed to changes in tourism income.
According to the minister, the budget deficit risks rising to 9% from the 7.1% previously projected. He said the government's top priority now is cutting state spending and fiscal consolidation, but that help from the World Bank and other international partners is needed to put the economy back on track.
The government forecasts growth of 3.8% next year and 6.8% in 2028. The World Bank has agreed to provide USD 250 million over the next three years, and the Maldives signed a USD 1.5 billion framework agreement with the International Islamic Trade Finance Corporation (ITFC) last month.
Zareer said the government is also working to add aircraft to the national airline and increase flights to new markets such as Australia, to boost tourism. He said the aim is to diversify the economy and raise the share of renewable energy to 33% by 2028.
The minister did not say how much new assistance the Maldives is seeking, or from which institutions besides the World Bank.