Business

India proposes Free Trade Agreement with Maldives

Published

1 month ago

25/05/2024

Minister of Economic Development and Trade Mohamed Saeed on Saturday announced Indian government’s proposal for a Free Trade Agreement (FTA) between the two countries.

At the press conference held by the Ministry of Economic Development on Saturday to highlight the achievements and initiatives of the state body in the last six months, Minister Saeed said India has expressed interest for a Free Trade Agreement with the Maldives besides a SAFTA.

“President of the Maldives has extended the opportunity to the international community” Saeed commented.

Despite revealing Indian’s proposal for an FTA, Saeed did not disclose further information of the high-level discussion meeting between him and the Indian High Commissioner to the Maldives Munu Mahawar.

The two had discussed on further strengthening the cooperative ties of both nations in multiple areas.

The South Asian Free Trade Area (SAFTA) is the free trade arrangement of the South Asian Association for Regional Cooperation (SAARC).

The agreement came into force in 2006, succeeding the 1993 SAARC Preferential Trading Agreement. SAFTA signatory countries are Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka, and the Maldives.

Under the SAFTA agreement, export duties on Maldives fish products to India were quashed in 2022.

Earlier, during former President Abdulla Yameen Abdul Gayoom’s administration, Maldives government entered into a Free Trade Agreement with China. However, Yameen’s successor, former President Ibrahim Mohamed Solih had criticized the agreement and announced his administration would not honor due to its particulars.

The Maldives-China Free Trade Agreement breathed new life after Dr. Mohamed Muizzu took charge as Maldives President in November 2023. The incumbent President said the agreement was a symbol of strong relations between the Maldives and China, adding his administration was ready to continue honoring the agreement.

While India has expressed interested for an FTA with the Maldives, the relations between the two countries soured earlier after three high-ranking Maldivian officials made derogatory remarks against Indian Prime Minister Narendra Modi.

Moreover, President Dr. Muizzu has been labeled as “pro-China” in several Indian media outlets, but the Maldives head of state had later responded to the claims stating he is “pro-Maldives”.

Source(s): sun.mv

Business

Fitch downgrade Maldives’ credit ranking citing obstructions to repay debts

Published

1 day ago

27/06/2024

Fitch has downgraded Maldives’ credit rating, citing obstructions to repay debts.

In this regard, Fitch downgraded Maldives’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC+’ from ‘B-‘.

Fitch attributed the downgrade risk associated with rising external debt coupled with weakening foreign reserves, external financing and liquidity metrics.

They detailed that Maldives’ foreign reserve, which stood at USD 748 million in May last year, had decreased to USD 492 million by May of this year.

Meanwhile, it was noted that the government has USD 233 million in sovereign external debt-servicing obligations and USD 176 million in publicly guaranteed external debt-servicing obligations due in 2024.

Fitch forecasts external debt servicing will climb to USD 557 million in 2025 and exceed USD 1.0 billion in 2026, including repayment of a USD 500 million Sukuk, which will intensify pressure on the government’s external liquidity.

Nevertheless, Fitch expects the government to rely on bilateral and multilateral financing support and the general state debt to rise to 117.6% of GDP in 2026 from an estimated 109.4% in 2023 – which is more than double the projected median for other ‘B’ category nations.

Fitch is amongst the biggest three credit ranking agencies in the world. Maldives was first ranked by the agency in 2016.

A credit rating is an evaluation of the credit risk of a prospective debtor predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting.

Source(s): sun.mv

Business

Government reveals plans to increase MMPRC budget to USD15 mln

Published

2 days ago

26/06/2024

Minister of Tourism Ibrahim Faisal has announced that efforts are underway to raise the budget of the Maldives Marketing and Public Relations Corporation (MMPRC) to USD 15 million for 2025. This announcement was made during the ceremony marking the commencement of operations by China’s Chongqing Airlines to the Maldives.

Minister Faisal emphasised the government’s dedication to enhancing the tourism industry and highlighted the critical role MMPRC plays in this expansion. He expressed his vision of increasing MMPRC’s budget to USD 15 million, noting that the investment in tourism would significantly boost economic growth in the long term.

For this year, MMPRC’s approved budget was USD 9.99 million. The proposed increase for next year would raise the budget by USD 4 million.

Providing further insights, MMPRC Managing Director Ibrahim Shiuree discussed ongoing efforts to promote the Maldives on a global scale. He emphasized the importance of seeking opportunities for international advertising and mentioned that discussions with all relevant industry authorities would be conducted. Shiuree also highlighted the need to observe and learn from the strategies used by other competitive nations in promoting their tourism industries.

The Ministry of Tourism has revealed plans to advertise each individual island of the nation separately, ensuring that the unique features of every island are showcased. The ministry has also assured support for all efforts aimed at expanding the tourism industry across the entire nation.

Source(s): PsmNewsa

Business

Economic growth projected to expedite compared to 2023

Published

5 days ago

23/06/2024

Maldives Monetary Authority (MMA) has anticipated the economic growth rate will increase compared to 2023.

MMA revealed that the quarterly reports of all the major economic industries, other than the fisheries’ industry, reported expansion in activity. The Quarterly Economic Bulletin Report includes comprehensive details on the progress of industries. The tourism industry was highlighted as the primary contributor to the nation’s economic advancement.

MMA’s report indicated that national productivity stood at 4% in 2023 and is expected to rise to 4.9% this year. The growth in tourist arrivals, particularly from key markets like China and Europe, is anticipated to enhance not only the tourism sector but also sectors such as transport and communications, thereby stimulating overall economic acceleration.

The Quarterly Business Survey conducted four times annually since 2013, aims to determine the ongoing activities and anticipated changes for the industries. MMA expressed confidence that these insights will inform strategic decision-making and policy formulation moving forward.

Source(s): PsmNews