Maldives to take stringent measure to cut spending as economic woes worsen
Fitch, one of the world's largest rating agencies, downgraded Maldives' rating from B-minus to CCC-plus on Wednesday.
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President Mohammed Muizzu has decided to cut down on political positions and to not hold the upcoming Independence Day and other similar events amid the looming economic crisis.
The President announced this in an X post on Thursday evening, saying that he has decided to take several steps to cut state spending.
The President said various measures will be taken to reduce the cost of running the government. Among them, he mentioned:
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Reduce the number of political positions
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Reduce or avoid expenses for ceremonies on various occasions
“The authorities have been asked not to organise parades, games and receptions for the upcoming Independence Day and to reduce the expenses manifold by holding one function to celebrate Independence Day,' he said.
"Many more steps will be taken in the coming days”.
Fitch, one of the world's largest rating agencies, downgraded Maldives' rating from B-minus to CCC-plus on Wednesday. The rating means:
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A rating given to countries with a very high probability of defaulting on foreign debt
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Interest rates on bonds sold by such countries to raise money increase and people are less interested in investing in such bonds
The main reasons Fitch downgraded Maldives' rating were:
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Increased barriers to foreign funding
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Maldives' debt and financial situation are becoming fragile
With the CCC-plus rating, the interest rate on bonds sold by Maldives to raise money abroad will increase and people will be less interested in investing in such bonds.
With this, the government has decided to revise or increase the existing GST and import duty levied on goods purchased and services procured as part of measures to increase the state's revenue.
