Finance unveils stimulus package with MVR 370 million in loans
Highlighted that now was the time to commit to providing economic relief and reduce sate expenditure
Minster of Finance Ibrahim Ameer detailed the state's finances up until 20 May 2021 in a press conference held on Thursday
The government of Maldives announced on Thursday a new economic relief package, at a time the Maldives has been forced to strengthen restrictions in light of a devastating fourth wave of Covid-19 infections.
With a lot of small and middle income businesses hit hard across the Maldives' capital and islands placed under monitoring due to Covid-19, the Ministry of Finance unveiled a economic stimulus package through which relief can be provided for struggling businesses.
In detailing the upcoming loans for economic stimulus, Minister of Finance Ibrahim Ameer stated that the government had provided significant assistance to small and middle income businesses in the past year as well. Minister Ameer went on to confirm that Bank of Maldives (BML) will be issuing MVR 370 million in loans beginning next month.
Additionally, Minister Ameer reveled that the government will be issuing special Covid relief loans to small and middle income businesses through the SME Bank.
Finance Minister Ibrahim Ameer added that the loans would be issued at a six percent interest rate, alongside a one-year grace period for loan repayment, with the full payment due within five years.
Referencing utility subsidies announced earlier President Ibrahim Mohamed Solih for households and businesses, Finance Minister Ameer revealed that these subsidies were also part of the economic relief package. Minister Ameer also revealed that USD 1.3 billion had been secured in financing by the state in 2020
During the press conference, Finance Minister Ameer shared a a number of details and projections with regards to the Maldives' post-pandemic economic recovery. Minister Ameer stated that based on present data, the Maldives' economy was forecasted to return to pre-pandemic levels by 2022-2033, and that unemployment rates were down in 2021 when compared to the previous year.
Finance Minister Ameer revealed that the Maldives economy had declined between 27.5 percent and 29.4 percent in the year 2020. Earlier projections had suggested that the Maldives' GDP would increase by 13.5 percent as the tourism industry, which was hard hit by the global Covid-19 pandemic, bounced back in 2021.
Minister Ameer added that tourism recovery was progressing much better than predicted, and that data collected thus far in 2021 suggested that the Maldives economic recovery would progress somewhere between 13.5 and 34.1 percent. Minister Ameer added that the most likely scenario was for the Maldives' economic recovery to increase by 22.7 percent. Minsiter Ibrahim Ameer stated that inflation would likely be around 2.3 percent in 2021, due to base effect carrying over from 2020.
Minister Ameer revealed that the government had spent MVR 10.2 billion from the state budget in 2021 by 20 May, and that a total of MVR 7.1 billion had been collected as revenue within that period. The revenue collected is 33.6 percent of the predicted revenue for this year's budget.
During the press, Minister Ameer highlighted that the state had committed to a number of measures to cut down on costs, and stated that the amount collected in tax revenue had been higher than previously expected as the tourism sector begins to equalize towards the middle of the ongoing year.
