"The main basis of next year's budget is to facilitate debt repayment"

The cornerstone of the government's proposed MVR 64.2 billion budget for 2026 is debt repayment, Finance Minister Moosa Zameer told the parliamentary budget review committee on Monday.

Zameer said the budget is designed to ensure uninterrupted public services while addressing foreign debt obligations due next year. “One of the main pillars of this budget is to facilitate repayment of the foreign debt due in 2026. Aside from that, expenditures have been streamlined in line with estimated revenue,” he said.

The budget also prioritizes health, education, and welfare, including monthly stipends for students studying abroad under government loans and scholarships.

Zameer highlighted the challenge of repaying a one-time USD 600 million debt next year. He said President Dr. Mohamed Muizzu has made multiple trips abroad to negotiate debt restructuring, allowing repayments to be spread over longer periods. Some projects remain pending, he added.

Hanimaadhoo MP Abdul Ghafoor Moosa noted that while the debt may not increase productivity, MVR 27 billion allocated for debt and subsidies will be reflected in the budget book. He did not elaborate.

Former Finance Minister Ibrahim Ameer, speaking at an MDP Economic Committee press conference on November 6, warned that the proposed deficit budget would increase debt. He said import duties were not performing above expectations and that the government would need significant financing.

Zameer previously stated that by the end of 2023, official reserves had fallen below USD 591 million, with usable reserves under USD 100 million. However, he now reports a surplus for the first 40 weeks of 2025, with official reserves at USD 860 million and usable reserves estimated at USD 200 million.

He described the 2026 budget as one that aims to “save Maldives from debt,” noting that MVR 8.8 billion will be required to finance the deficit.