Finance Minister: Maldives will not go bankrupt, can repay loans

Finance Minister Ibrahim Ameer said on Wednesday that Maldives’ economic status will not follow the path of Sri Lanka’s and that the country’s debt is totally manageable.

He said this in response to a statement made by Maldives Monetary Authority (MMA)’s Governor Ali Hashim, when he was questioned by the Parliament’s Economic Committee earlier in the week regarding the proposed amendments to the Tourism Act to reduce resort rent. Hashim had said a reduced resort rent, which would lower the income generated from this source by 40 percent, may lead Maldives on the path of an economic crisis, much like its neighbor Sri Lanka.

JPMorgan, one of the largest US investment banks, has also placed the Maldives among the most threatened countries with low reserves and non-repayment of loans due to the Russia-Ukraine war and the difficulty of obtaining loans.

However, Finance Minister Ameer had said economic activity in Maldives is going well. He noted that tourist arrivals are quite similar to arrival levels if 2019.

He said there were no difficulty in paying off Maldives' debt and it was being paid as stipulated in the state budget. Therefore, Ameer said there was no fear for an economic default.

"Our GDP growth will improve by 13-18 percent," he said in Dhivehi.

Commenting on the report by JP Morgan, Ameer said Maldives was different than other countries on their list, as made clear by the country's economic activity. He said the tax authority, Maldives Inland Revenue Authority (MIRA), would know so as well as they would be aware of the US Dollars that Maldives is receiving.

Maldives have generated USD 316 million in the past four months through MIRA. The authority has also received MVR 7.4 billion (USD 479 million) in income over the same period.

Ameer said there was no fear of Maldives' reserve running out and the methods they were utilizing to manage the fund were good as well.