Minister Zameer said that strong policies have led to both rating agencies and the IMF now refocusing on cost cutting rather than raising alarms about potential bankruptcy.
Fears of the Maldives going bankrupt have subsided, with financial institutions no longer raising the issue said Finance Minister Moosa Zameer said today.
Responding to questions raised in parliament, Zameer said that state debt stood at MVR 124 billion when the current administration took office. He highlighted that about half of this debt was accumulated over the last five years, with 24 percent of government revenue allocated to debt servicing.
"I am happy to say that President Muizzu is actively implementing services required by the people. While earlier reports from the IMF raised concerns about bankruptcy, we have now moved beyond that scenario and improved revenue streams," Zameer said.
The minister also noted that debt repayments to certain countries have been deferred and emphasized the government's strategic plans to address the debt burden.
Minister Zameer said that strong policies have led to both rating agencies and the IMF now refocusing on cost cutting rather than raising alarms about potential bankruptcy.
Finance Ministry's budget states that total debt will rise to MVR 139 billion by the end of 2024 and is projected to increase further to MVR 150 billion in 2025. This is equivalent to 124 percent of GDP.
The ministry said that government direct debt is estimated to remain above 95 percent of GDP by 2026, and highlighted the need for continued fiscal reforms and spending reductions to address the growing debt burden.
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