Maldives won't go bankrupt, finance minister assures

Finance Minister Moosa Zameer said on Tuesday that the Maldives is not at risk of bankruptcy, crediting President Mohamed Muizzu's strategic measures to address the country's financial challenges.

Speaking on the current state of the economy in a parliament sitting, Zameer highlighted the government's proactive steps to restructure debt, streamline expenditures, and strengthen revenue streams.

When President Muizzu's administration assumed office, the national debt stood at MVR 124 billion. According to Zameer, half of this debt was accrued during the previous administration between 2018 and 2023.

He acknowledged that 24% of the state’s revenue currently goes toward debt repayment, but emphasised that the government’s 2025 budget is designed to reduce this burden without compromising essential services to the public.

“If we attempt to repay all debts immediately while maintaining public services, it would strain our resources and lead to bankruptcy, as noted in an International Monetary Fund (IMF) report,” Zameer explained.

However, he assured that the government is taking calculated steps to avoid such a scenario, including rationalising expenditures and renegotiating debt terms through bilateral agreements.

Zameer also highlighted President Muizzu's achievements in addressing the economic crisis over the past year. He pointed out that international rating agencies do not foresee the Maldives facing bankruptcy but have recommended reducing spending to stabilise the economy further.

“Through the president’s leadership, we are fixing revenue streams, optimising expenses, and extending the timeline for debt repayment. These measures ensure economic stability and sustainable growth for the Maldives,” Zameer said.