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The Maldives has sought assistance from the World Bank and other international partners as rising oil prices and declining tourism revenue put pressure on public finances and economic growth.
Mariyam Adheela
Male’: The Maldives has sought support from the World Bank and other international partners to address economic challenges caused by rising global oil prices and lower tourism revenue.
Finance Minister Hassan Zareer told Reuters that government spending on energy subsidies is expected to triple this year, potentially increasing the budget deficit from the previously projected 7.1 per cent to 9 per cent of gross domestic product (GDP).
Zareer said the government was working to reduce expenditure and introduce fiscal reforms but still needed external assistance to strengthen the economy and foreign currency reserves.
Economic growth is projected to slow to around 1 per cent in 2026 amid global uncertainty and weaker tourist arrivals.
To support the tourism sector, the government plans to lease additional aircraft for the national airline and increase flights to Australia, one of the Maldives’ major tourism markets. Discussions are also under way with seven additional international airlines.
Moody’s has upgraded the Maldives’ sovereign credit rating from Caa2 to Caa1, citing measures aimed at increasing foreign currency inflows and reducing debt repayment risks.
However, the Asian Development Bank has warned that high public debt, declining fisheries exports and global uncertainty continue to pose risks to the economy.
The bank has also highlighted delays in reforming loss-making state-owned enterprises and subsidy schemes as key challenges to improving the country’s economic position.
