World Bank warns Maldivian foreign ministry | india | Hindustan Times
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World Bank warns Maldivian foreign ministry

india Updated: Dec 19, 2006 14:51 IST

The Maldivian Foreign Ministry has been warned over excess spending by the World Bank, the Minivan News daily reported on Monday.

In its recently published report, Global Economic Prospects for 2007, the World bank warned that a high fiscal deficit could be a major threat to future growth.

The state budget for this year was a record Rf 9 billion, and is expected to be Rf 12 billion for 2007, of which Rf 5 billion will come from international finance and aid. The opposition points out the proposed budget is 118% of GDP, the Minivan News reported.

"Should policy not tighten and demand continue to expand well in excess of supply, inflation outturns will be higher, current account deficits larger, and the subsequent slowdown more pronounced and disruptive," the report said.

The report also noted that the tsunami recovery drive has pushed gross domestic product (GDP) up by 18% in the Maldives.

The study goes on to say 46 new resorts will contribute a further 7% to GDP growth in the near future, with the government predicting 12% growth.