Reuters logo
5 years ago
Maldives sets ambitious 6.1 pct deficit goal in 2013
November 27, 2012 / 6:17 PM / 5 years ago

Maldives sets ambitious 6.1 pct deficit goal in 2013

2 Min Read

MALE, Nov 27 (Reuters) - Maldives on Tuesday announced an optimistic budget-deficit target of 6.1 percent of gross domestic product for 2013, down from this year's 16 percent, that it hopes to reach with an ambitious set of cost-cutting and revenue-raising measures.

The country overshot its 2012 deficit goal as a number of investment projects were put off and the defence budget ballooned after a controversial power transfer in February.

The International Monetary Fund earlier this month forecast the 2012 deficit would rise as high as 16 percent of GDP, much worse than the government's original target of less than 9.8 percent.

Finance Minister Abdulla Jihad said the archipelago would cut its fiscal deficit to 6.1 percent of GDP if all the budget proposals are implemented.

The controversial power transition on Feb. 7, when former President Mohamed Nasheed claimed he was forced to step down at gun point, has taken its toll on this year's budget. State revenue dwindled as public-private partnerships were called off.

The Indian Ocean island nation, popular for high-end tourism, has proposed raising its tourism tax by 15 percent from July next year and reintroducing import duties, as suggested by the IMF among other measures, to improve sluggish revenue.

Targeting subsidies, freezing state hiring and shutting down 22 loss-making companies were among the cost-cutting proposals.

The IMF earlier this month said strengthening government finances is the most pressing economic priority. The global lender expects economic growth to slow to 3.5 percent this year from the last year's 7.5 percent, weakened by depressed tourism and weak global conditions.

A modest economic recovery is forecast for 2013 and beyond, the IMF said. It said inflation was 10.1 percent in September, which should slow to under 6 percent next year and decline further thereafter.

$1 = 15.3700 Maldives rufiyaas Reporting by J.J. Robinson in Male; Writing by Shihar Aneez; edited by Larry King

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below