The Executive Board of International Monetary Fund (IMF) approves the request for emergency financial assistance to address the challenges posed by the COVID-19 pandemic in the Maldives. The Executive Board approved the disbursement of about USD 28.9 million to be drawn under the Rapid Credit Facility (RCF) to help cover the balance of payments and fiscal needs, stemming from the COVID-19 pandemic.
The pandemic is inflicting significant damage, especially on tourism activity, and is expected to result in a substantial weakening of the GDP growth, balance of payments and the fiscal position of the Maldives. The government of the Maldives acted quickly to put in place containment measures and is seeking support from the international community for its crisis response plan. IMF financing will help to catalyse further assistance from the international community.
Deputy Managing Director and Chair of the Executive Board Tao Zhang said the COVID-19 pandemic is having a pronounced negative impact on the Maldivian economy and is expected to cause a significant growth contraction. Tao said containment measures are adversely affecting domestic economic activity, adding the temporary stop of tourist arrivals, the main source of foreign earnings, has severely weakened the fiscal and external positions, giving rise to large financing gaps.
Chair of the Executive Board Tao Zhang said the authorities have responded quickly to the COVID-19 outbreak in the Maldives, including specific travel restrictions and subsequently more comprehensive travel measures. Tao also noted the Maldives put together a set of measures to alleviate its social and economic fallout. He said the financial assistance will cover part of the financing gap, supporting fiscal rebalancing and the implementation of the anti-crisis plan. He added additional support from the international community will be needed for the Maldives.