The International Monetary Fund (IMF) projects that the Maldives will become the eighth most indebted country in the world relative to its Gross Domestic Product (GDP) by the end of this year.
According to the IMF's World Economic Outlook report, the Maldives' debt-to-GDP ratio is set to reach 129.4 percent this year. This will make the Maldives the most indebted nation in the South Asian region. While Japan (204.4 percent), Singapore (171.9 percent), and Sudan (169.1 percent) top the global list, the United States and Ukraine rank below the Maldives.
In the history of the Maldives, the debt-to-GDP ratio peaked during the Covid-19 pandemic in 2020 at 155.7 percent. After subsequently declining, the debt rose to 122.4 percent in 2023 and 133.3 percent in 2024. Although it fell to 125.4 percent last year, the IMF projects that the debt will increase again this year.
While the economic growth forecast for this year was previously downgraded, the IMF expects the economy to grow by 4.6 percent next year. However, to improve the state's fiscal health, the IMF advises reforming subsidies to target only those most in need, alongside reforming state-owned enterprises. It also highlighted the importance of investing in renewable energy to cut fuel expenditures. With USD 1.1 billion in debt repayments due this year, the state has passed a record-high budget.
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