Minister of Finance Ibrahim Ameer has assured that the Maldivian economy is still in a strong position, and there is no risk that the country will default on its debts.
The finance minister made the remarks following a report by the US investment bank, JP Morgan, that the Maldives is among the countries that are under the risk of falling into the same economic situation as Sri Lanka, with the foreign reserve expected to be exhausted soon, leaving the country debt-ridden and unable to pay off loans.
Speaking to the press, Finance Minister Ameer said the report which made the claims on the Maldivian economy was not an official statement by JP Morgan, but rather was based on an interview given to Reuters. The minister noted the report was not based on an official study of the actual economic and financial situation of the Maldives. He said the GDP growth of the Maldives is fast enough to remove any risks of defaulting on debts.
The finance minister further noted the Maldives did face the risk of defaulting last year, with a USD250 million bond maturing in June this year. However, the minister noted USD192 million of the bond has been paid back with the help of Sukuk liability management carried out in 2021. He added the government has the funds to pay off the remaining USD62 million, which includes interest and another bond which is due in 2026.
The finance minister further stated the GDP growth of the Maldives is currently between 12-18%, which matches the projections made before the start of the year. He noted the tourism industry is growing at a steady pace and nearing the pre-pandemic figures despite some negative impacts of the Russia-Ukraine conflict.
He said measures are to be taken to counter the impacts of the Ukraine- Russia conflict on fuel prices and stocks. However, he said development projects will not be affected by the rise in fuel prices, as funds for major projects such as the Greater Male’ Connectivity Project (GMCP) are arranged from abroad.
Many international financial organisations such as the International Monetary Fund (IMF) and the World Bank have stated the Maldives is among the fastest growing economies post-pandemic.