Minister of Finance Ahmed Munawar: “Confirms that the government’s economic policy is working… expect more of the same for the remainder of this administration’s term”
The Government of the Maldives welcomes the latest Moody’s credit profile of B2 stable, released yesterday in their annual credit analysis for the Maldives. The rating, the report states, reflects healthy economic growth on the back of a competitive tourism sector, strong debt affordability matrix supported by a large revenue base and a well-funded banking system.
Maldives' GDP grew to 3.9% in 2016 from 2.8% the previous year. In addition to the tourist industry, economic growth has been driven by the administration’s infrastructure investment. As well as investment in infrastructure, the administration has looked to its international economic partners to fund key projects – one of which is the expansion of Velana International Airport. The work, which commenced last year and is accelerating in progress, will increase the capacity from 1.5 to 7 million passengers per year.
Beyond tourism, the administration is encouraging wider economic diversification – which the Moody’s report underlines as key to achieve further growth. The current administration established Special Economic Zones (SEZs) to stimulate business and entrepreneurship, like finance and shipping, through tax incentives. Tourism related enterprises may not exceed 20% of businesses in these zones. Moody’s also highlighted the increase in foreign exchange reserves over the past year. This was bolstered by the nation’s successful inaugural bond issuance last summer, which was twice oversubscribed.
Responding to the report, Minister of Finance and Treasury Ahmed Munawar stated: “The recent Moody’s report is further vindication of this Administration’s economic plans. It confirms the current approach is working. Year on year, this administration is delivering the policies and projects that increases economic prosperity for our nation’s citizens.
“The credit rating is a public good; it benefits the whole nation. As such, it is incumbent upon our communities to maintain, and improve, the rating. We must work together to sustain political stability and create an enabling environment for growth and fiscal balances. This administration remains committed to policies necessary to improve the credit rating.
“The report highlights challenges ahead, and we are ready to tackle them. All developing countries must navigate economic obstacles in pursuit of advancement. Yet the strengths the report identifies encourages this administration to stick to the economic framework that has brought us this far. Expect more of the same for the remainder of this administration’s term.”