Maldives govt labels bailout rumors "baseless"

The government late Saturday labelled the intensifying rumors of an imminent International Monetary Fund (IMF) bailout deal as "false and baseless".

Social media have been rife with rumors that the government had agreed to accept to an IMF package and an official announcement was imminent. 

Economic Ministry in statement on Saturday refuted the rumors insisting that it was an attempt to derail the significant economic and fiscal reforms initiated by the government. 

The statement assured that public interests and order in the country's banking system will be maintained despite efforts to proceed with the reform agenda to build a stronger economy. 

The ministry said despite fiscal constraints and challenges inherited from the past, the nation's real economy was performing better than expected. 

"We urge all parties to refrain from spreading untrue and baseless rumors that will undermine our collective efforts to streamline and build confidence in the economy," the statement read. 

In a statement issued after an IMF delegation's visit to the Maldives, it was stated that the country's economy has started to function after the Covid-19 pandemic and the country's economy will grow at 5.2% this year. However, this is a figure lower than last year.

The IMF has welcomed the government’s self-imposed fiscal reform agenda to reduce economic losses by tightening public debt and financing debt in a sustainable manner.

If a country goes for the IMF package, it has to cut its domestic spending significantly. For example, the IMF package could require staffing cuts in civil service sectors.