The Ministry of Finance has forecast a total state debt of MVR67 billion in 2020 in light of the economic crisis.
The global viral pandemic; COVID-19 upended the economic structure of the island nation same as on international front.
According to the country's Ministry of Finance the island nation's government will earn only MVR15 billion against a debt of MVR67 billion.
While speaking at the Economic Committee of Maldives Parliament, Minister of Finance Ibrahim Ameer asserted initial projection of state revenue for the year was at MVR30 bilion.
However, Minister Ameer added the revenue will reach only half the initial projection; and noted the state has commenced several preventive measures to reduce economic and financial damage.
"We have taken steps to reduce the state's recurrent expenditure by MVR1 billion. However, due to the COVID-19 pandemic, expenditure on health and disaster management will hike. So far a total of MVR280 million have been expended in the efforts to counter the viral disease," Minister Ameer commented.
Moreover, he asserted the initial estimation of state debt with the exclusion of sovereign guarantee was at MVR57 billion which has bumped in light of the economic dent.
"While the debt is projected to increase, inversely the national productivity rate will decline so we estimate a significant change on debt set against productivity," the minister further detailed.
Minister had further highlighted the decline of fish exports from Maldives; which is the result of drop in demand.
On international front, several countries had their governments announcing temporary shutdowns on cafeterias, restaurants and food chains much like in Maldives.
"Foreign currency rotated in the country has declined while the spending curve has dropped. Imports are expected to drop since tourist resorts in the country have closed down. Additionally the supply chain slow down will affect the construction sector, slowing it down as well" Minister Ameer added.
Meanwhile Maldives government earlier assured the country will be able to make an economic recovery from the current pit. State is currently holding discussions with international monetary bodies to seek assistance and guidance.
