Maldives Economic Update

The political situation remains in a state of flux in the Maldives, with crucial elections coming up. The presidential elections are scheduled for early September 2013, and the Majlis (parliamentary) elections for April 2014. The fiscal position re...

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Bibliographic Details
Main Authors:	Rajatha Wijeweera, Kirthirsri, Kularatne, Chandana, Eymard Fonseka, Daminda, Gomez Ozorio, Camilo
Format:	Economic Updates and Modeling
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING AMORTIZATION ARBITRATION ARREARS ASSET QUALITY AUCTIONS BALANCE OF PAYMENTS BANK ACCOUNT BANK LENDING BANKING PROJECT BANKING SECTOR BOND BOND SETTLEMENT BORROWER BUDGET DEFICIT CASH FLOW COMMERCIAL BANKS COMMODITY COMMODITY PRICE COMMODITY PRICES CONCESSION CONSOLIDATION COURT RULING CREDIT GROWTH CURRENCY CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT CUSTOMS DUTY DEBT DEBT CRISIS DEBT OBLIGATIONS DEBT SUSTAINABILITY DEFICIT FINANCING DEFLATION DEMAND FOR GOVERNMENT SECURITIES DEPRECIATION DEVALUATION DOMESTIC DEBT DOMESTIC MARKETS ECONOMIC DEVELOPMENTS ECONOMIC GROWTH ECONOMIC OUTLOOK ENVIRONMENTAL MANAGEMENT EXCESS LIQUIDITY EXCHANGE RATE EXCHANGE RATE BAND EXCHANGE-RATE EXPENDITURE EXPENDITURES EXPORT VOLUMES EXPORTS EXPOSURES EXTERNAL DEBT EXTERNAL SHOCKS FINANCIAL CRISIS FISCAL BURDEN FISCAL CONSOLIDATION FISCAL DEFICIT FISCAL DEFICITS FISCAL POSITION FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE SYSTEM FOOD PRICE FOREIGN ASSETS FOREIGN DEBT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN FINANCING FOREIGN RESERVES GDP GDP PER CAPITA GINI COEFFICIENT GOVERNMENT ARREARS GOVERNMENT ASSETS GOVERNMENT DEFICIT GOVERNMENT EXPENDITURES GOVERNMENT FINANCES GOVERNMENT PAPER GOVERNMENT REVENUE GROWTH RATE HUMAN CAPITAL HUMAN CAPITAL DEVELOPMENT IMBALANCES IMPORT IMPORTS INCOME INCOME GROWTHS INFLATION INFLATION RATE INFLATIONARY PRESSURES INSURANCE INTEREST COST INTEREST RATES INTERNATIONAL PRICE INTERNATIONAL RESERVES INVESTMENT PROJECTS LABOR FORCE LEASE PAYMENTS LOAN LOAN RECOVERY MARKET PARTICIPANTS MISALIGNMENT MOBILE PHONE MONETARY AUTHORITIES MONETARY AUTHORITY MONETARY POLICY MONEY GROWTH NOMINAL EXCHANGE RATE OIL PRICES OPEN MARKET OPEN MARKET OPERATIONS OUTPUT PARALLEL EXCHANGE RATE PARALLEL MARKET PAYMENT DEFAULTS PENSION PHONE BANKING POLITICAL UNCERTAINTY PORTFOLIO POVERTY REDUCTION PRICE HIKES PRICE INCREASE PRICE INDEX PRIVATIZATION PUBLIC BANK PUBLIC DEBT PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC INVESTMENT PURCHASING POWER PURCHASING POWER PARITY REAL GDP REAL GROWTH RATE RECEIVABLES REMITTANCE REMUNERATIONS REPATRIATION RESERVE RESERVE MONEY RESERVES RISK OF DEBT SALARIES SALARY SALE OF GOVERNMENT SECURITIES SETTLEMENT SETTLEMENTS SHORTFALL SHORTFALLS SLOW GROWTH SLOWDOWN SOCIAL PROTECTION STATE BANK T-BILL T-BILL RATE T-BILLS T-BONDS TAX TAX REVENUE TAX REVENUES TECHNICAL ASSISTANCE TOTAL CREDIT TOTAL EXTERNAL DEBT TOTAL REVENUE TRADING TREASURIES TREASURY TRUST FUND TRUST FUNDS VOLATILITY WAGES
Online Access:	http://documents.worldbank.org/curated/en/2013/04/17694611/maldives-economic-update http://hdl.handle.net/10986/16494

Description
Summary:	The political situation remains in a state of flux in the Maldives, with crucial elections coming up. The presidential elections are scheduled for early September 2013, and the Majlis (parliamentary) elections for April 2014. The fiscal position remains in a precarious situation, with the government cash-flow position considerably weakened. Against this backdrop, the government has resorted to very imprudent means of managing the cash-flow situation: (i) ad-hoc borrowings from the banking and private sectors at high interest rates, (ii) monetizing, and (iii) running huge payment arrears, amounting to over 10 percent of gross domestic product (GDP). Continuation of these measures will likely stoke significant imbalances in the economy. The precarious external situation presents the biggest challenge to the country. The situation has been aggravated by continued high fiscal deficits as well as recent debt settlements. Current gross official reserves are below two months of imports and, in face of increased monetization of the deficits, can deteriorate further. In light of the precarious external situation, external debt sustainability has also become a major concern. Under current trajectories, total external debt obligations are projected to reach over 115 percent of GDP by 2015- a seriously vulnerable situation, given the recent slowdown in tourism, and the susceptibility of the economy to external shocks (such as commodity price hikes).

Maldives Economic Update

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