News Desk
MALE’ — The Maldives has moved through the most intensive external debt repayment year in its history, according to a presentation released by the President’s Office this week, which shows total external debt obligations reaching $1,331.80 million in 2026 before dropping sharply in the years ahead.
The spike was driven by the maturity of the $524.68 million sovereign Sukuk bond issued in 2020, which the government repaid in April without taking on new foreign loans. Foreign reserves stood at $1.3 billion by end of March. The presentation notes that by early April, the Sovereign Development Fund had accumulated over $400 million, while the government had also settled a $400 million currency swap with the Reserve Bank of India and $50 million of a $200 million bond sold to the State Bank of India. In total, the government says it cleared roughly $1 billion in debt obligations without new borrowing.
With the Sukuk cleared, external debt obligations are projected to fall to $717.9 million in 2027 and $704.8 million in 2028.
The presentation breaks down outstanding direct external debt by administration. Debt accumulated under President Ibrahim Mohamed Solih between 2018 and 2023 accounts for $1,141.7 million of the remaining balance, the largest share by a significant margin. The Yameen administration between 2013 and 2018 accounts for $710.4 million. Debt from the Nasheed and Waheed period between 2008 and 2013 accounts for $150.4 million, and pre-2008 obligations stand at $106.3 million. The current Muizzu administration, in office since November 2023, accounts for $239.7 million.
On the fiscal side, the primary balance, which measures revenue against spending before interest payments, moved from a deficit of minus 10.5 percent of GDP in 2023 to a surplus of plus 0.4 percent in 2025. The overall fiscal deficit narrowed from minus 6.4 percent in 2023 to minus 3.6 percent in 2025.
Total debt as a share of GDP stood at 123.6 percent in 2023 and is projected to ease to 121.2 percent by end of 2026. Domestic debt as a share of GDP is projected to fall from 51.3 percent to 44.5 percent over the same period, a decline of 6.8 percentage points. External debt as a share of GDP is projected to fall from 108.8 percent to 104.8 percent, a reduction of 4 percentage points over the 2.5-year period.
A separate breakdown of domestic debt by category shows direct domestic debt, the portion owed to local creditors, falling from 51.3 percent of GDP in 2023 to a projected 44.5 percent by end of 2026. External-facing domestic debt continues to rise, from 72.3 percent of GDP in 2023 to a projected 76.6 percent by end of 2026, reflecting the country’s continued reliance on foreign financing for domestic needs.
Fitch Ratings upgraded the Maldives’ credit rating from CC to CCC- following the Sukuk repayment, removing what the agency had identified as an immediate default risk.
The government appointed Hassan Zareer as Finance Minister following the resignation of Moosa Zameer last week.
Figures are drawn from a presentation published by the President’s Office.
