Minister says Moody’s outlook upgrade reflects govt reforms
Moody’s on Thursday affirmed the Maldives’ sovereign credit rating at Caa2 while revising the outlook to ‘stable’.
The Minister of Finance and Planning, Moosa Zameer, has said that Moody’s decision to upgrade the Maldives’ credit outlook from ‘negative’ to ‘stable’ reflects the positive impact of the government’s fiscal reforms, adding that the administration remains focused on “fiscal consolidation, responsible debt management and sustainable growth for our country.”
In a post published on X following the rating announcement Thursday, the minister said the change in outlook demonstrates renewed confidence in the Maldives’ economic direction under the leadership of President Mohamed Muizzu. He noted that improvements in external liquidity, stronger dollar revenues, growth in the Sovereign Development Fund (SDF), and tighter budget discipline were central to the upgrade.
Moody’s on Thursday affirmed the Maldives’ sovereign credit rating at Caa2 while revising the outlook to ‘stable’. The rating was assigned in September last year with a ‘negative’ outlook, which the agency has now lifted after assessing the impact of fiscal measures undertaken over the past year.
In its statement, the international credit rating agency said the change was driven by visible improvements in the country’s economic position and liquidity. Measures such as higher airport taxes and fees, adjustments to green tax and T-GST rates, and the enforcement of foreign exchange regulations have increased foreign exchange earnings and strengthened liquidity.
Moody’s also reported an increase in official reserves and highlighted the sharp rise in the SDF balance, which reached USD 126 million as of 9 November, compared with USD 15 million a year earlier. The agency noted improved expenditure control and a narrower projected budget deficit for 2025, as well as support from external partners through credit lines and currency swap arrangements, including from India.
However, Moody’s cautioned that risks remain, including the USD 500 million Sukuk and other debt repayments due next year. It said stronger reserves and the expanded SDF provide some buffer to meet upcoming obligations.
Following the announcement, the Ministry of Finance and Planning said the shift to a ‘stable’ outlook demonstrates the effectiveness of the government’s fiscal restructuring efforts and its commitment to long-term debt sustainability.
Earlier in June, Fitch Ratings maintained the Maldives’ sovereign credit rating at ‘CC’.
