- Aim to create an investor friendly business environment
- Economy will expand with mega projects
- Guaranteed projections on major projects
Economic Minister Mohamed Saeed has revealed that the Government aims to increase GDP from its current rate of US$ 6500 to US$ 12000.
Speaking to Avas, Minister Saeed said the Government does not believe in "putting all eggs into one basket", but on diversifying investment so as to maximize the returns to the public. As such, he said the Government has been engaged in establishing and developing economic ties with various nations, nations who are serious about conducting businesses with the Maldives. Minister Saeed added that these initiatives, so far, have been successful.
Noting that initiatives such as SEZ, China Maldives Free Trade Agreement and I-havan, Minister Saeed said he was assured that these projects will drive economic growth. He said with these projects the Government was confident that these initiatives will nearly double GDP, boosting it to US$ 12000.
MMA statistics, like the Minister's, had predicted a boom for the economy, with GDP expected to increase to 6.4 percent. Even though the debt is expected to account for 65 percent of GDP this year, this is driven by loans into major development public sector investment programs.
President Yameen, himself, has assured that even though debt was on the rise, with the increase in GDP, Maldives will gain the ability to pay back the loans by four times over.
While the Government had predicted a rosy outlook for the economy, international parties remain skeptical.
The World Bank publication "South Asia Economic Focus 2016" published last month said that even though income increased year on year, the spending had outpaced those earnings. The report highlighted that salaries, subsidies and other such recurrent expenditure was maintained at a stable level, but the large scale public sector investment projects had increased the national public debt, thereby resulting in fiscal imbalances.
The report forecast that deficit could reach close to 20 percent of GDP by 2018 and could exceed 120 percent of GDP by 2020. Such a situation, the report said, would breach the policy-dependent thresholds defined under the Low-Income Country Debt Sustainability Framework (LIC-DSF).
