Growth has been strong and is projected to remain so in 2019 driven by tourism, commerce, and construction. Nonetheless, the Maldives remains highly vulnerable with reduced policy space due to large and growing public debt and rising pressures on external stability. The imbalances call for urgent action for maintaining stability. Going forward, the new administration’s main challenge is to manage fiscal and external imbalances given weak buffers and tightening global financial conditions, while large projects are ongoing.
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