Maldivian debt to reach MVR 82.8 billion by end of 2021

Finance Minister Ibrahim Ameer Photo: Majilis

Male’, Maldives –  Finance Minister of Maldives Ibrahim Ameer has revealed that Maldivian debt is estimated to be MVR 82.8 billion at the end 2021.

During the Parliament meeting on Monday, Minister Ameer said that the government is doing everything they can to speed up the recovery of Maldives’ economy, but that a side effect of the current attempts at economic management is an increase in debt.

“By the end of 2021, Maldivian debt is expected to be at MVR 82.8 billion. This is 124.8% of GDP” Minister Ameer said.

He explained that while it is important to make the national debt sustainable, fiscal consolidation is currently not the best option. He said that fiscal consolidation should be done after recovery and that economic experts have said that Covid effects will only last short term.

“We shouldn’t believe this problem will last for years. New government policies are aimed at rapidly recovering from our current state and reviving the economy,” the Minister said

Further, Minister Ameer said that debt management work will need to be carried out for the next few years, and noted that the government aims to take concessional loans when securing loans in the future. He said that a creditor conference is planned to for this purpose.

Concessional loans are extended on terms that are much more generous than market loans. These terms include interest rates below those available on the market or by grace periods, or a combination of these. Concessional loans typically have long grace periods.

Ameer also said that the government will repay all debts and that repayment plans have already been made, and that he is confident that the national debt can be managed.