The World Bank says Maldivian public debt reached 116.5 percent of its GDP in early 2024.
Release earlier this month, the latest Maldives Development Update: Seeking Stability in Turbulent Times notes that the economy grew by 7.7 and 4.5 percent year-on-year in the first and second quarters of 2024, bolstered by an 8.5 percent increase in tourism in the first half of 2024.
World Bank highlighted that foreign exchange reserves are low and are enough to cover only 1.5 months of imports.
It noted that reserves fell from USD 590.5 million at the end of 2023 to USD 443.9 million in August 2024.
It stated that there is pressure due to high debt repayments, with total public debt rising to 116.5 percent of GDP in the first quarter of 2024, up from 110.4 percent last year during the same period.
Despite transfers to the Sovereign Development Fund, the current balance of $65 million is not sufficient to cover rising financing needs. Fiscal risks from loans, trade payables, subsidies, and investments in state-owned enterprises (SOEs) remain elevated.
The World Bank called for timely fiscal reforms to reduce spending and support long-term growth.
