Minister of Finance Ibrahim Ameer said on Sunday that Maldives had to take such a big debt due to the economic situation the country was in due to Covid, and if the pandemic had not occured, they would not have borrowed up to MVR 20 billion.
Answering a question by Naifaru MP Ahmed Shiyam from the Public Accounts Committee researching the MVR 42.6 billion state budget for 2023, Minister Ameer said the pandemic lead Maldives to make MVR 14 billion in revenues instead of MVR 30 billion that the country was projected to make that year.
Prior to the Covid-19 pandemic, state debt was at 79 percent of GDP, which equaled to MVR 68 billion. However in 2020, it was nearly 150 percent of the country's GDP.
The budget projects Maldives debt will reach MVR 113 billion 2023, which is approximately twice the accumulated debt of the nation in 2019.
Ameer had said they had organized repayments in a manner that will directly benefit the citizens of Maldives.
"We have budgeted to increase the salaries of health workers as well, which is an important matter. It is an issue that a medical officer returning to Maldives after studying abroad for over seven years earns MVR 25,000," he said.
Next year's budget also include provisions for developmental projects such as installing the infrastructure so that water supply and sewerage systems would be available in administrative islands.
The budget proposed by the government includes MVR 8.4 billion being set aside for various developmental projects. This amounts to 20 percent of the proposed MVR 42 billion budget.
Ameer said the country's manufacturing capacity will increase with PSIP projects that was included in the budget.
He noted that Maldives' productivity has been growing rapidly in the past two years and the economy can reach pre-pandemic levels of 2019 by the end of 2022. He said the economy is expected to grow by 7.6 percent this year.
"With the easing of Covid-19 restrictions and the ease of travel, the number of tourists visiting the country have increased in 2021 and will continue to increase in 2022 and 2023," the finance minister said.