In a financial report released by the Ministry of Finance, it’s revealed that the Maldivian government’s debt has surged to MVR 124 billion at the close of 2023, marking a significant uptick of MVR 10 billion from the previous year. The breakdo inwn showcases a domestic debt of MVR 73 billion and an external debt of MVR 51 billion.
Alarming figures reveal that the state’s debt has escalated by MVR 30 billion over the past two years, hitting 68 percent of the country’s Gross Domestic Product (GDP) for domestic debt and 48 percent for external debt. Notably, MVR 14 billion of the total debt includes state-backed guarantees.
Of the domestic debt, MVR 59 billion has been borrowed from the Pension Office and commercial banks, with the Maldives Monetary Authority (MMA) disbursing an additional MVR 8.7 billion last year. Meanwhile, MVR 458 million was allocated to settling internal debt.
Looking ahead, 2026 looms as a pivotal year for the government, with a substantial debt repayment of USD 1 billion (MVR 15.4 billion) on the horizon. To navigate this fiscal challenge, the government plans to tap into a sovereign fund, earmarking MVR 9.8 billion for debt repayment. The current fund balance stands at MVR 7.4 billion, with aspirations to bolster it to MVR 9.7 billion by year-end. As the government grapples with mounting debt, the nation watches closely to assess the economic implications of these financial maneuvers.