The Maldivian economy is at a critical phase: MATATO
Maldives Association of Travel Agents and Tour Operators (MATATO) has revealed that the country's economy is in a critical phase.
According to the research published by the association which focuses on the impact of the dollar shortage. The survey revealed the magnitude of the government spending and the impact on local tourism. The survey showed that the Maldives had seen a decline of 1.6 per cent decline compared to the pre-pandemic level.
The research also pointed out that the country's banking sector is facing significant difficult issues, including the dollar crisis, the lack of profitable competition among banks, and the weakness of the rules governing banks.
The research also showed that MMA has lost control over the black market for dollars and failed to regulate the dollar shortage which led to a major slowdown in the sector.
The research compared the countries in the regions in the fees charged by locals which revealed that the Maldives banks have massive charges. However, the number of foreign currency transactions on credit and debit cards is relatively low.
The research noted that the government's debt swelled to $6.8 billion in today's scenario. This is equivalent to around 113 per cent of the country's GDP.
Noting that Matato has already raised its voice against the impact of the increase in TGST and GST on the tourism sector. The organisation said this has forced resorts to raise the selling price, reduce the chances of competing with other tourist destinations in the world, and impact the country's economy.
The research also noted that in the last four to six years, there has been a decline in investment by many people who are capable of investing in the tourism sector.
"Based on this report, it is felt that the Government of Maldives needs to act swiftly in this regard in order to save the country's economy,"
Despite this research, government debt is estimated to grow with over half of the country set to face financial problems.