29 percent of next year’s budget allocated for debt repayment

Nearly a third of the Maldives’ proposed 2026 state budget will go toward debt repayment, according to official budget figures proposed to Parliament.

The budget allocates MVR 12.9 billion for principal repayments and MVR 5.5 billion for interest payments; a total of MVR 18.4 billion, or 29 percent of the overall budget.

The largest repayments due next year include a USD 500 million (MVR 7.7 billion) sukuk issued in 2021 and a USD 100 million (MVR 1.5 billion) bond sold to the Abu Dhabi Fund in 2018. Both instruments are due for full repayment to bondholders in April 2026.

Next year’s budget also allocates MVR 90 million to repay domestic debt, which is an increase of MVR 42 million from this year’s allocation. In addition, the state will repay MVR 1 billion to multilateral and bilateral agencies, MVR 109 million in pension accruals, and MVR 1.6 billion in buyer’s credit obligations.

The country’s total debt is projected to reach MVR 159 billion in 2026, equivalent to 128 percent of GDP. By the end of this year, the figure is expected to stand at MVR 158 billion.

To finance next year’s MVR 8.8 billion budget deficit and meet debt obligations, the government will need to raise MVR 26.3 billion.