Zareer: MVR 10B debt repaid within past eight months, the equivalent to past nine years

Finance Minister Hassan Zareer, on Thursday, stated that the current administration has repaid MVR 10 billion debt over the past eight months.

The Minister gave a presentation during a session of ruling People's National Congress (PNC)’s congress on Thursday, where he outlined government expenditure from foreign currency reserves, with particular emphasis on debt servicing and fuel imports.

The Minister said the largest share of the current administration's foreign currency expenditure has been allocated to fuel imports and debt repayments.

According to statistics presented by the Minister, fuel import expenditure reached its highest level in the past seven years in 2022, amounting to USD 831 million. Over the following three years, annual fuel expenditure remained above USD 700 million. However, expenditure on fuel imports has declined so far this year, standing at USD 683 million.

Minister Zareer further stated that debt repayment obligations remained relatively low between 2015 and 2020. Following the COVID-19 pandemic, debt servicing requirements increased to approximately MVR 400 million and have continued to rise, according to records from the Ministry of Finance.

Describing last year and the current year as periods marked by the highest loan repayment obligations in the country's history, the Minister confirmed that Rufiyaa 10 billion in loans had been repaid during the first eight months of this year.

"This amount is equivalent to the total debt repaid from 2015 through 2023. Therefore, this represents the most significant financial burden we have had to manage," the Minister remarked.

The government has faced record debt repayment obligations this year amid the country's high national debt. While MVR 10 billion has been repaid so far, estimates indicate that between USD 600 million and USD 1 billion in debt remains outstanding. The government also completed the final payment yesterday on a USD 150 million Treasury Bond (T-bond) issued by India during the administration of former President Ibrahim Mohamed Solih.

These financial pressures have followed years of warnings from international financial institutions urging the Maldives to reduce government expenditure amid the continued growth of external debt.