IMF国际货币组织全球-Maldives_2001-Article-IV-Consultation_43页_2mb

Maldives 2001 Article IV Consultation Summary

Core Content

The IMF Country Report No. 19/279 for Maldives outlines the economic developments, policy discussions, and staff appraisal during the 2001 Article IV consultation. The report provides insights into the country's economic performance, challenges, and policy responses, including the devaluation of the rufiyaa and the need for macroeconomic reforms.

Main Points

1. Economic Overview

• Geographic Challenges: Maldives is an island nation with limited land and high social infrastructure costs. Its economy is heavily dependent on tourism and fisheries.
• Growth and Income: Annual GDP growth averaged around 8% during the 1990s, increasing per capita income by over 70% to above US$2,000 in 2000.
• Poverty and Social Indicators: Despite improvements in social indicators, poverty remains high in outer islands, where over half the population earns less than 15 rufiyya per day.
• Foreign Aid: Maldives is a least developed country (LDC) and has received substantial foreign aid, though the importance of aid is declining.

2. Recent Developments (2000–2001)

• Growth Slowdown: Economic growth slowed to 4.8% in 2000 from 7.4% in 1999.
• Inflation Turned Negative: Inflation declined by 1.1% in the twelve months to end-2000 due to the appreciation of the rufiyaa.
• Devaluation in 2001: On July 25, 2001, the rufiyaa was devalued by 9%, with new buying and selling rates set at 12.75 and 12.85 rufiyya per dollar.
• Current Account Deficit: The deficit narrowed to 9.5% of GDP in 2000 due to improved domestic exports and private capital inflows, and is projected to be 8.4% of GDP in 2001.

3. Foreign Exchange Issues

• Exchange Rate System: The rufiyaa was pegged to the U.S. dollar since October 1994.
• Foreign Exchange Shortage: A significant parallel market premium of 6–12% existed over the official rate. The MMA provided foreign exchange to commercial banks, but it was insufficient to meet demand.
• Devaluation Impact: The devaluation led to a sharp increase in inflation, with staff projecting a 12-month inflation rate above 4% in 2001 and 6–7% in early 2002.
• Reserve Coverage: Official reserves covered 3.3 months of imports at end-2000, expected to decline to 3.1 months by year-end 2001.

4. Fiscal and Monetary Policies

• Fiscal Deficit: The 2000 fiscal deficit was 4.6% of GDP, significantly exceeding the target of 1.2%.
• Monetary Expansion: Central bank financing of fiscal deficits and excess demand for foreign exchange led to rapid monetary expansion.
• Fiscal Reform Needs: The staff emphasized the need for fiscal discipline, including spending cuts and ending deficit monetization, to address foreign exchange pressures.

5. Policy Recommendations

• Fiscal Retrenchment: The staff recommended a 1.5–2% cut in domestically-financed capital spending.
• Exchange Rate Adjustment: Devaluation was deemed necessary but should be accompanied by stronger fiscal and monetary policies to sustain benefits.
• Exchange Rate Flexibility: The staff suggested that the rufiyaa might be better pegged to the euro than the U.S. dollar, as the euro’s depreciation relative to the dollar could reduce the real effective exchange rate.

Key Information

• Staff Report Authors: Mr. Arnason and Ms. Kongsamut.
• Devaluation Impact: The 9% devaluation of the rufiyaa on July 25, 2001, was expected to improve the current account balance and government finances, but at the cost of higher inflation.
• Data Gaps: Gaps and inconsistencies in economic data continue to impede policy design and surveillance.
• Banking System: The banking system remains generally sound with low non-performing loans and high capital adequacy ratios.
• Exchange Rate Adjustments: The staff concluded that exchange rate adjustment should be delayed until other options, such as spending cuts and increased hard currency supply, are fully explored.

Policy Discussions

A. Addressing Foreign Exchange Pressures

• The staff recommended fiscal retrenchment as the most appropriate response to excess demand.
• The MMA should increase sales of foreign currency to commercial banks to improve supply.
• The devaluation was considered necessary but must be supported by tighter financial policies to avoid short-term inflationary pressures.

B. Macroeconomic Policy Reforms

• Fiscal Policy: The need for fiscal discipline and reform was emphasized.
• Monetary Policy: The central bank's role in financing deficits was questioned.
• Exchange Rate Policy: The staff suggested that the rufiyaa might be better pegged to the euro to reduce the real effective exchange rate.

Staff Appraisal

• The banking system remains stable with low non-performing loans and high capital adequacy ratios.
• The real effective exchange rate has appreciated significantly, affecting competitiveness in tourism and fisheries.
• The devaluation is expected to have limited benefits without structural reforms.
• Fiscal reforms are essential to ensure long-term economic stability.

Conclusion

The 2001 Article IV consultation highlighted the need for fiscal discipline, exchange rate flexibility, and monetary restraint to address the economic imbalances and challenges facing Maldives. The staff emphasized the importance of reforms to ensure sustainable growth and reduce vulnerability to external shocks.