The government projects that the cost of servicing state debt next year will be 62 percent lower than the amount expected to be spent on debt repayments this year.
According to the 2027 state budget submitted to the People's Majlis, MVR 4.46 billion is expected to be spent on debt servicing next year, while the Finance Ministry estimates that MVR 11.74 billion will have been spent on debt repayments by the end of this year.
The main reason for the comparatively lower debt servicing cost next year is that a large portion of the state's debt was settled during this year without taking on additional borrowing. This year saw the highest debt servicing expenditure in a single year in the history of the Maldives. Compared to the MVR 5.31 billion spent on debt servicing in 2025, debt servicing expenditure in 2026 increased by 54.7 percent.
Debt servicing costs rose this year as the government had to pay USD 500 million in a single payment as the repayment of its sukuk, along with an additional USD 24 million in interest. In addition, the government repaid USD 100 million of the bonds sold to the State Bank of India, settling a total of USD 200 million, and fully repaid USD 400 million borrowed through a currency swap during the year. With these large debts settled, the amount the state will need to spend on debt repayments in the coming years is expected to fall significantly.
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