MVR 10bn – 68% of revenue - spent on loan repayments and interest

A parliamentarian browses the 2026 budget book on October 30, 2025. (Photo/People's Majlis)

The state has spent over MVR 10 billion on loan repayments and financing and interest costs, according to the latest weekly fiscal report released by the Finance Ministry.

The report, released on Tuesday, shows the Maldives secured MVR 15.4 billion in revenue and grants as of April 30.

The MVR 10 billion on loan repayments and financing and interest costs therefore accounts for a staggering 68 percent of the total revenue – a level that international financial institutions warn is alarmingly high.

The MVR 15.4 billion in revenue and grants marks a 7.5 percent increase compared to the MVR 14.3 billion generated during the same period last year.

But the total expenditure also increased, rising by 13.8 percent to MVR 14.3 billion.

Recurrent expenditure alone rose by 11.1 percent to MVR 12.6 billion, while the spending on salaries, wages and pensions rose to MVR 5.3 billion – marking a 10 percent increase compared to the MVR 4.8 billion spent during the same period last year.

The Maldives had a staggering USD 1.1 billion in debt repayments due this year, including a USD 500 million sukuk and a USD 400 million under a currency swap agreement with India – both of which the government settled in April.

The fiscal report shows the state spent MVR 8.6 billion from the budget on loan repayments, and another MVR 1.7 billion financing and interest costs. The total spending on loan repayments and financing and interest costs therefore accounts for MVR 10.4 billion.

The high amount of state funds that goes into servicing debt is one of the biggest challenges facing the Maldives. The country had spent 25 percent of its revenue last year on loan repayments and financing and interest costs.

Citing default risks, Moody’s has downgraded Maldives’ credit rating from CAA1 to CAA2, while Fitch downgraded the country’s credit rating from CCC+ to CC. The World Bank has warned the situation makes it harder for the Maldives to secure foreign assistance to alleviate the crisis it faces.