The state debt currently stands at MVR 124 billion. The highest debt repayment is scheduled for 2026, where MVR 15 billion has to be repaid, marking the highest debt repayment in a single year in the Maldives' history.
The World Bank has called on Maldives to expedite measures to manage the country's debt.
In a press release following the World Bank delegation's four-day visit to the Maldives, it was highlighted that urgent measures are needed to contain untargeted spending, raise more revenues, and manage debt more prudently.
World Bank Vice President for South Asia, Martin Raiser, was part of the World Bank's delegation that visited the Maldives. During the visit, discussions were held with stakeholders on the Maldives' development agenda.
The World Bank delegation met with President Dr. Mohamed Muizzu, Minister of Finance Dr. Mohamed Shafeeq, Minister of Climate Change, Environment and Energy Thoriq Ibrahim, and Minister of Economic Development and Trade Mohamed Saeed, along with other cabinet ministers and development partners.
Martin highlighted the urgent need for fiscal reforms in the face of significant risks stemming from rising spending, limited foreign exchange reserves, high debt, and elevated global interest rates. He noted that the Maldivian economy is facing serious challenges due to increased spending and declining reserves.
The government has already planned to implement some of these policies.
The state debt currently stands at MVR 124 billion. The highest debt repayment is scheduled for 2026, where MVR 15 billion has to be repaid. This is the highest debt repayment in a single year in the Maldives' history.
“Maldives has achieved impressive development results, including in improving access to health, education, housing and other public services,” Martin said.
"However, large fiscal and external deficits put these gains at risk and require urgent measures to contain untargeted spending, raise more revenues and manage debt more prudently. This is essential to create the space for sustained investments in people, nature and infrastructure that the Maldives needs to grow and thrive,” he added.
The World Bank emphasized that subsidies need to be targeted to reduce government spending, reiterating a consistent message from the agency.
This year's state budget has allocated MVR 600 million for targeted subsidies. According to the budget, the measures have to be implemented in July 2025. Targeted subsidies will be available to 65 percent of the Maldivian population, according to the Ministry of Finance.
Targeted subsidies will be provided for electricity, fuel, staple foods, and sewerage beginning July next year.
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