Minister of Finance Ibrahim Ameer has stated that restructuring the state debt would make it harder for businesses to receive foreign investments. He made the remark in a letter sent to the Parliament of the Maldives to answer inquiries on the government’s efforts to restructure the state debt.
In the letter, Minister Ameer said that international rating agencies would downgrade the selective default rating of the country if the government were to restructure the debt. He, therefore, said that the best course of action is to reduce expenditure and increase revenue, adding that the state’s fiscal strategy for 2023-2025 focuses on these efforts.
Additionally, Minister Ameer said that the debt-to-GDP ratio of direct and guaranteed loans taken in 2021 was 118%, highlighted that the government accepted 100% in direct loans and 18% in guaranteed loans that year. He estimated that the ratio would be 111% by the end of 2022 as the government accepted 98% in direct loans and 13% in guaranteed loans.