MP Shareef cautions the state against accumulated govt. debt

MP for Addu City Maradhoo Constituency Ibrahim Shareef | Photo: Sun/Fayaz Moosa

Malé, Maldives – The MP for Maradhoo Constituency Ibrahim Shareef has warned the government of increasing annual government debt, urging the state to consider inflation and the ability to acquire further external financing.

MP Shareef said this while discussing Budget 2022. The Addu City representative stated that Maldives is not equipped to handle an accumulated state debt of MVR 100 billion.

The Parliamentarian also warned the government against depending on potential external financing.

The proposed budget by the state for the year 2022 is set at MVR 36.9 billion, including an expected revenue of 12 percent as grant assistance (MVR 2.9 billion) with a total deficit of MVR 9.7 billion.

Meanwhile, Fitch has upgraded Maldives to a B- rating.

Fitch forecasts GDP growth of 29.4% in 2021 and 10.0% in 2022, largely reflecting a low-base effect from contraction by 33.5% in 2020, one of the sharpest drops globally. A combination of high public debt, weak foreign-exchange buffers and a strong dependence on tourism, leaves the Maldives vulnerable to shocks, and uncertainty about the evolution of the coronavirus pandemic persists according to the Fitch report.