The Maldives is expected to remain the fastest-growing economy in the South Asian region in 2023, but it faces significant dangers rising debt, reports the World Bank.
In their recent “Global Economic Prospectus” the World Bank revealed that the Maldives’ economic growth would moderate to 8.2 percent this year, which is lower than previous forecasts.
The report also indicated that the Maldives’ economic growth is the fastest in the region owing to the tourism industry. It highlighted the strong rebound of Maldives tourism in 2022, which returned the Gross Domestic Product (GDP) to pre-pandemic levels, and it is expected to reach 12.4 percent this year.
India was listed as the second fastest recovering economy in the South Asian region with a growth rate of six percent in 2023.
The overall South Asian region's economic growth rate for the current year is reported to slow down to 5.5 percent.
In the prospectus, Maldives was placed among the small island nations with the highest debt risks and also among eight small states out of 20 countries with the highest estimated debt owed to China. The list also included Mauritius, Dominica, and Montenegro among the eight small states.
The Maldives government is expected to spend approximately eight percent of its 2023 state budget on debt repayment, which is MVR 5.5 billion. The government estimates total state debt to rise to MVR 114 billion by the end of 2023, which is over 100 percent of the country’s GDP.
The state is required to repay a total of MVR 30 billion in debt within the following four-year period. The Maldives government will repay its highest debt in 2026, which would be MVR 9 billion.
Sign In