Minister of Finance Ibrahim Ameer has revealed the debt to gross domestic product (GDP) of the Maldives is improving. He made the remarks during a meeting between senior officials of the Ministry of Finance and the Parliamentary Committee on Economic Affairs regarding a bill to amend the Maldives Tourism Act.
At the meeting, Minister Ameer said the increase in the country’s GDP is also increasing revenues for the state, which in turn reduces the need to accept more debt and improve the debt-to-GDP ratio. He said the government is managing its debt and currently there is no risk of default.
Furthermore, Minister Ameer highlighted the measures taken to manage the debt such as the decision to conduct a Sukuk liability management exercise in 2021. He noted the Maldives had faced the risk of default last year, with a USD250 million bond maturing in June this year but that USD192 million of the bond has been paid back with the help of Sukuk liability management. He also said the government has the funds to pay off the remaining USD62 million, adding that the biggest loan to pay back is due in 2026, but there is no concern the country would not be able to pay off the loan.
International financial organisations such as the International Monetary Fund (IMF) and the World Bank have said the Maldives is among the fastest-growing economies post-pandemic. As such, the GDP growth of the Maldives has been projected to be much faster this year compared to other countries in the region due to the measures taken by the government.