Male, highlighting that the Maldives has been spending "beyond its means" for decades, the World Bank has warned that the archipelagic nation faces high debt distress risks and financing challenges, making it vulnerable to shocks. Becomes sensitive to.
Faris H. Haddad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka, also said the island nation's annual debt service needs are expected to be US$512 million for the current and next years and US$1.07 billion in 2026 .
Haddad-Zervos' statement, posted on her official . The nation, which is heavily dependent on tourism, suffered badly due to the lockdown imposed due to the COVID-19 pandemic and began to recover only in 2023.
According to the Finance Ministry's quarterly debt bulletin for quarter 1, 2024, published on June 1, public and publicly guaranteed (PPG) debt has increased to US$8.2 billion – amounting to 110 per cent of Maldives' GDP.The Finance Ministry reports that the state debt increased by US$90.8 million within the first three months of the year. The total debt had reached US$8.09 billion by the end of 2023.
“For decades #Maldives has been spending beyond its means. “A sharp increase in expenditure and subsidies has increased the deficit, leading to a weak fiscal position and unsustainable debt,” Haddad-Zervos’ post on X said on Monday.
They reported and warned that annual debt service needs are likely to be US$512 million for 2024 and 2025, and US$1.07 billion in 2026: "The Maldives faces high debt distress risks and financing challenges, making it Becomes sensitive to shock.,
The top World Bank official suggested immediate fiscal reforms, saying phasing out blanket subsidies, addressing weaknesses of SOEs, improving health care spending efficiency and streamlining the public investment program could be some of the measures. .
He also posted a video with his message on X. “Last year, the Maldivian economy was in turmoil,” Faris began his video message posted on Instagram. Decrease in tourism income.
"The decision to halt subsidy reforms, coupled with continued high spending, has put pressure on the country's finances," news portal Sun.mv said on Wednesday.
Earlier, the 'Scaling Back and Rebuilding Buffers' report released on May 8, the World Bank's latest Maldives Development Update, said the country's tourism and other key industries are "seeing a slowdown.,
The Sun, MV, further quoted the update as saying that the increase in tourist arrivals is offset by lower spending per tourist and lower staycations – impacting positively on the Maldives' overall GDP growth.
The Washington-based lender's forecast also highlighted "the need for fiscal consolidation in the country, which is expected to hit real household income due to subsidy reforms and a reduction in government spending and investment."
"Additionally, the country's economy is projected to grow 4.7 percent this year, lower than the previous estimate, reflecting a moderation in the pace of growth," the World Bank said."
Faris H. Haddad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka, also said the island nation's annual debt service needs are expected to be US$512 million for the current and next years and US$1.07 billion in 2026 .
Haddad-Zervos' statement, posted on her official . The nation, which is heavily dependent on tourism, suffered badly due to the lockdown imposed due to the COVID-19 pandemic and began to recover only in 2023.
According to the Finance Ministry's quarterly debt bulletin for quarter 1, 2024, published on June 1, public and publicly guaranteed (PPG) debt has increased to US$8.2 billion – amounting to 110 per cent of Maldives' GDP.The Finance Ministry reports that the state debt increased by US$90.8 million within the first three months of the year. The total debt had reached US$8.09 billion by the end of 2023.
“For decades #Maldives has been spending beyond its means. “A sharp increase in expenditure and subsidies has increased the deficit, leading to a weak fiscal position and unsustainable debt,” Haddad-Zervos’ post on X said on Monday.
They reported and warned that annual debt service needs are likely to be US$512 million for 2024 and 2025, and US$1.07 billion in 2026: "The Maldives faces high debt distress risks and financing challenges, making it Becomes sensitive to shock.,
The top World Bank official suggested immediate fiscal reforms, saying phasing out blanket subsidies, addressing weaknesses of SOEs, improving health care spending efficiency and streamlining the public investment program could be some of the measures. .
He also posted a video with his message on X. “Last year, the Maldivian economy was in turmoil,” Faris began his video message posted on Instagram. Decrease in tourism income.
"The decision to halt subsidy reforms, coupled with continued high spending, has put pressure on the country's finances," news portal Sun.mv said on Wednesday.
Earlier, the 'Scaling Back and Rebuilding Buffers' report released on May 8, the World Bank's latest Maldives Development Update, said the country's tourism and other key industries are "seeing a slowdown.,
The Sun, MV, further quoted the update as saying that the increase in tourist arrivals is offset by lower spending per tourist and lower staycations – impacting positively on the Maldives' overall GDP growth.
The Washington-based lender's forecast also highlighted "the need for fiscal consolidation in the country, which is expected to hit real household income due to subsidy reforms and a reduction in government spending and investment."
"Additionally, the country's economy is projected to grow 4.7 percent this year, lower than the previous estimate, reflecting a moderation in the pace of growth," the World Bank said."
