Although official records show that MVR 4.4 billion was assigned to repay government debts in 2021, only MVR 980 million has been repaid as the year ends, according to official numbers.
According to finance ministry data, just 22% of the MVR 4.4 billion earmarked for debt payback in 2021 has been returned so far.
The government spent roughly MVR 800 million on debt repayment last year, which is 25% less than the amount expected for 2020. Debt repayment was reduced as a result of the relief granted by governments during the COVID-19 pandemic.
This year’s debt repayment fund includes a USD 250 million bond issued by the Maldives on the foreign market.
Furthermore, the country’s public debt has soared in the last four years, increasing the amount that must be repaid. By the end of next year, the public debt is likely to exceed MVR 91 billion.
The state budget for 2022 includes around MVR 5.7 billion for debt repayments, an increase of almost 18% above the amount allocated this year. MVR 3.8 billion of this will be spent on foreign debt.
According to the state budget 2022 report, the amount spent on loan repayment is projected to grow in the next years as the government is expected to take extra loans as a result of the COVID-19 outbreak and a rise in interest rates on loans.