Following the repayment of Sukuk, the Government has been able to attain a significant improvement in the debt sustainability indicators.
The President's Office
The Government has successfully settled the USD 500 million Sukuk issued in 2021, thereby managing to reduce its debt stock by utilising the Sovereign Development Fund, and other foreign currency balances. In this regard, the Government has completed the repayment of the principal amount of USD 500 million and the associated coupon amounting to USD 24.68 million.
Following the COVID-19 pandemic and the external shock from the Russia-Ukraine war in 2022, the Maldives faced a severe deterioration of the fiscal and external sector position. To address these macroeconomic imbalances, the Government implemented revenue-enhancing measures in 2024, particularly in relation to foreign currency revenue streams. In conjunction with fiscal policy measures, the Maldives Monetary Authority (MMA) implemented monetary policy reforms, notably the enactment of the Foreign Currency Act and associated regulations mandating the conversion of foreign currency earnings. These policy changes have structurally strengthened the external sector position, evidenced by the accumulation of the Gross International Reserves, which reached record levels at the end of March 2026. Further, these revenue policy measures also aided the accumulation of liquid foreign currency balances in the Sovereign Development Fund. Indeed, the successful repayment of the Sukuk was facilitated by the prudent policies undertaken by the Government since 2024.
The Maldivian economy was poised to have a strong fiscal year in 2026, with real GDP growth of 5.3 percent projected in the Government Budget for 2026, supported by the completion of the new passenger terminal in the Velana International Airport, and the substantial upgrade to the Hanimaadhoo International Airport. In fact, the Government recently recorded the highest ever revenue collections in the first quarter of this year, aided by record levels of tourist arrivals.
However, recent developments in the Middle East and associated spillovers to global energy and commodity markets are expected to adversely affect the medium-term growth and the macro-fiscal outlook. The Government remains confident in its ability to facilitate the availability and continuous supply of fuel to meet demand, and ensure the provision of public services and uninterrupted economic activity. Accordingly, the Government continues to enjoy access to existing multilateral trade financing facilities to meet annual energy requirements. Further, the Government is currently engaged with multilateral partners to secure additional financing to address the increased financing requirement for fuel supplies.
Following the repayment of Sukuk, the Government has been able to attain a significant improvement in the debt sustainability indicators. Looking ahead, the Government is committed to ensuring any additional borrowing will be aligned with Government’s priorities to safeguard fiscal and debt sustainability. In this regard, the Government has also recently concluded the successful rollover of a bilateral bond, and continues to engage with bilateral partners to mitigate refinancing risks, and to meet additional financing requirements.
Although global energy prices are projected to exert upward pressure on government expenditure, the Government is in the process of formulating a comprehensive set of fiscal policy measures, with a commitment to reducing the impact of the global energy crisis on the vulnerable population.
The Ministry of Finance and Planning continues to assess the macroeconomic situation, and the Government remains committed to ensuring macro-fiscal stability despite the evolving challenges in the global economy.
