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COLOMBO: The IMF has approved a 92.5-million-dollar bailout package to help the Maldives weather the global financial crisis, the international lender announced on Saturday.
The Indian Ocean nation's economy has been hard hit by a fall in tourism, lower fish exports and a drop in capital inflows, the International Monetary Fund (IMF) said in a statement released in the Sri Lankan capital Colombo.
"The programme aims to rebuild international reserves to prudent levels," IMF deputy managing director Takatoshi Kato said.
The country's foreign reserves fell to over just two months of imports this year, the IMF said.
Kato said the 36-month economic programme, approved by the Washington-based lender on Friday, aims to reduce the country's fiscal deficit and ensure that social programmes are not reduced.
He said the atoll nation had agreed to reduce the size of its government, cut civil servants' salaries, introduce corporate taxes and privatise loss-making enterprises while protecting the poor through targeted subsidies.
Since the 2004 Asian tsunami, which swamped many of the low-lying nation's resorts, the Maldives' external debt has soared to 91.6 per cent of gross domestic product (GDP) from 55.2 per cent in 2004.
The external debt is expected to peak at 96 per cent of GDP next year, the IMF said.
The IMF said the Maldives' economy is forecast to contract four per cent in 2009 after expanding by 5.8 per cent in 2008.
- AFP/sc
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