Nasheed: We have to listen to international indicators, including Fitch downgrade

Parliament Speaker, former President Mohamed Nasheed said on Saturday that Maldives must listen to international indicators, including the recent Fitch downgrade, after Maldives’ Finance Ministry said it refuses to accept the downgrade of the country’s credit ratings from B – to CCC.

Fitch downgraded Maldives’ credit rating on Thursday, warning the country is at risk of defaulting on loans.

Fitch projects a 16 percent growth in the tourism sector in 2021 and a 20 percent growth in tourism sector in 2022, but said the growth is lower than previous projections.

The credit rating agency also projects debt to jump to 110.7 percent of GDP and fiscal deficit to jump to 21.7 percent of GDP.

In a tweet on Saturday morning, Nasheed said that Maldives must listen to all international indicators, including the recent Fitch downgrade.

“But we will not default if we can restructure our external debt, esp. to Chinese commercial institutions,” said Nasheed. “With tourism and travel bouncing back, I remain optimistic.”

In a statement rejecting the Fitch downgrade on Friday, Finance Ministry said Maldives has never defaulted on loans and will continue to manage its debt.

Finance Ministry also provided assurance Maldives is repaying its loans and loans with sovereign guarantee on time.

The Finance Ministry referred to the improvement in the tourism sector, and said that the recovery of the tourism sector will solve foreign exchange hitches.

There were questions over the potential impact to the Maldivian economy at the onset of the COVID-19 pandemic, but the government has been issuing regular updates on the economic developments, said Finance Ministry.

 Fitch, in its statement announcing the credit rating downgrade, said that Maldives’ economy has been severely impacted by the pandemic, and is projected to be one of the worst-hit economies, globally. It projects the Maldives’ economic growth to take a 30 percent dive.