The public debt stood at MVR 67 billion at the end of 2020 and is predicted to rise to MVR 79 billion by the end of this year, the finance ministry said on Tuesday.
According to the finance ministry’s Fiscal and Debt Strategy Report, the public debt stood at MVR 67 billion, or 115 percent of GDP, at the end of last year, and is predicted to climb to MVR 79 billion, or 128 percent of GDP, by the end of 2021.
The report also showed that the external (foreign) debt totaled MVR 38 billion, while internal debt stood at MVR 41 billion.
The finance ministry attributes the massive increase in public debt on the COVID-19 pandemic, which dramatically affected the country’s revenue and economic progress.
The state debt has climbed by MVR 23 billion during the preceding five years, according to figures. In 2017, the public debt totaled MVR 44 billion, with external (foreign) debt being MVR 17 billion and internal debt totaling MVR 27 billion.
The finance ministry expects that the country’s GDP would grow by 15% by the end of 2021, despite a large increase in public debt.
The Export-Import Bank of China is responsible for the majority of external (foreign) debt, accounting for 38%, according to figures from the finance ministry. Bilateral loans account for 21% of total external debt, while multilateral loans account for 25% of total external debt.
The report also proposed measures for dealing with the debt crisis, including keeping external (foreign) debt below 70% of overall debt, cutting the average interest rate to 3% while extending loan grace periods by 8 years, and keeping annual debt owing at 30% of GDP.