The International Monetary Fund (IMF) warned the Maldives against potential “debt distress” during an Article IV consultation with the country on May 13th.
The statement said that “without significant policy change, the Maldives remains at high risk of external and overall debt distress.”
The organization issued the warning amid speculation that the country will borrow additional funds from China to build apartments, reclaim land, and upgrade airports.
The IMF also said that the Maldives understands that “strong and credible fiscal consolidation” is needed to restore debt sustainability and help rebuild international reserves. They also urged the country to increase revenue, decrease spending, and lower the amount of external loans to avoid a major economic crisis.
