The Maldives government has spent MVR494.4 million in loan repayment as of 16th February 2023, according to the Ministry of Finance.
The state will reportedly spend a total of MVR2.1 billion this year to repay outstanding loans.
Moreover, the ministry confirmed that almost 8% of this year’s state budget will be used to repay state loans, which amounts to MVR 5.5 billion. The Maldives government is expected to spend a total of MVR30 billion over the next four years, including 2023. The highest loan repayment to date, which is MVR9 billion, will be made in 2026.
Though the government is making strong efforts to repay loans, the total state debt of the country is projected to increase to MVR114 billion at the end of 2023. This is also more than 100% of the country’s national Gross Domestic Product (GDP).
As of 2023, the internal debt of the state doubled and is at MVR62 billion; in 2019, it was at MVR32 billion. Meanwhile, the external debt is MVR40 billion, which is an increment of MVR18 billion from 2019.
The Maldives Monetary Authority (MMA) – the country’s central bank – has advised the government to employ new policies to better manage the state debt. The central bank has also urged the government to improve responsible spending of the Sovereign Development Fund (SDF), which was created with the main objective of repaying loans.