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State debt will exceed MVR48 bln by year end: finance minister

Ahmed Aiham
13 November 2018, MVT 20:03
Minister of Finance Treasury Ahmed Munawar. PHOTO: HUSSAIN WAHEED / MIHAARU
Ahmed Aiham
13 November 2018, MVT 20:03

Minister of Finance and Treasury Ahmed Munawar declared that Maldives will accumulate a debt of MVR 48.6 billion by the end of the year.

While Munawar presented the estimated MVR 29.6 billion State Budget for 2019 at the parliament on Tuesday, he mentioned that MVR 25 billion had been spent on development projects in the past five years and that the stage debt had increased by MVR 23 billion.

The minister noted that the national debt stood at MVR 25.6 billion in 2013.

"State debt increased due to the state sourcing funds for the finished and currently ongoing major development projects during the past five years," said Munawar.

However, he highlighted that if these projects were implemented as planned, they would increase the country's capacity to settle the debt and increase state revenue.

Speaking about the major projects over the past years, Munawar highlighted the new runway project of Velana International Airport (VIA) and added that since Airbus A380s can now land in Maldives, it would increase tourist arrival rates, thus strengthening the main source of the country's economy.

Furthermore, Munawar mentioned the regional airports that the government has invested in and claimed that it would help to expand tourism across the country.

Highlights of Munawar's address

- Economic growth estimated to reach 7.6 percent.

- Maldivian GDP currently at MVR 53 billion.

- Maldivian GDP estimated to reach MVR 72 billion at the end of the year.

- Maldivian economy increased by 36 percent over the past five years.

- Official reserves to hold USD 674 million by the end of the year

- Official reserves were USD 368 million five years ago

Munawar stated that investments in the infrastructure of the islands will further expand the guesthouse industry as well as provide a dignified lifestyle for citizens. Moreover, he stated that the newly built Sinamale' Bridge will lighten the load on the already congested capital Male' City.

" Over 10,000 housing units constructed under the 'Hiyaa Project' in Hulhumale is a solution for the housing problem as well as many other social issues. With the opening of Dharumavantha Hospital, quality healthcare will be accessible in the Maldives. This will lower the amount of currency remitted from the country to access healthcare abroad," said the minister while presenting President-Elect Ibrahim Mohamed Solih's proposed state budget to the parliament floor.

The Finance Ministry estimates MVR 26.7 billion out of the MVR 29.6 billion budget to be expended during 2019. The budget estimates that MVR 23 billion will be received as free aid. Additionally, the economic growth will be maintained at 6.8 percent.

While the state deficit is at MVR 3.7 billion, it is estimated that the deficit will stand at MVR 3.7 billion the following year.

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