Maldives’ official reserves projected to rise to USD 903M next year

The central bank’s official reserves will rise to USD 903 billion next year, projects the Finance Ministry.

The Finance Ministry on Thursday submitted a proposed budget of MVR 64.2 billion for 2026 – marking the highest annual budget on record. This high figure is mostly due to the staggering debt obligations due next year.

Key budget highlights:

• Budget total: MVR 64.2 billion
• Expenditure: MVR 49.2 billion
• Recurrent expenditure: MVR 39.9 billion
• Capital expenditure: MVR 9.3 billion
• Debt repayment: MVR 12.9 billion
• Revenue and grants: MVR 40.4 billion
• Budget deficit: MVR 8.8 billion (7.1 percent of GDP)

Presenting the budget to the Parliament in the afternoon, Finance Minister Moosa Zameer said that the country’s official reserves had been below USD 591 million when the People’s National Congress (PNC) administration took office in 2023.

He said that the incumbent administration managed to boost official reserves to USD 673.4 million at the end of 2024.

Zameer said that the official reserves currently hold USD 838.6 million, and that they expect to boost this further to USD 903.7 million next year.

He added that the country’s GDP is expected to grow by 5.3 percent, driven mainly by a boost to tourism and other related sectors once the new international passenger terminal at the Velana International Airport fully opens, and more regional airports are built.

The budget financing requirement for next year is MVR 26.3 billion.

Planned sources of financing:

• MVR 16.8 billion through loans from foreign partners, sale of financial instruments such as bonds and sukuk, and through multilateral and bilateral financing
• USD 450 million or MVR 6.9 billion from the external market to refinance sukuk
• USD 300 million or MVR 4.6 billion in budgetary support from bilateral partners
• Around MVR 5 billion from domestic financial institutions
• MVR 4.2 billion from the Sovereign Development Fund

Addressing the Parliament, Zameer described next year’s budget as one that will save the Maldivian people from debt.

“It will have the Maldivian people from the huge debt this administration inherited, and will be the cornerstone to realizing President Dr. Mohamed Muizzu’s vision for development through careful policies without burdening the future generations,” he said, promising to implement measures to restore fiscal and debt sustainability.