World Bank Report: Maldives Has Spent Beyond Means and Faces High Debt Distress Risk
The World Bank has issued a stark warning regarding the economic situation in the Maldives, highlighting that the nation is at high risk of debt distress and facing significant financing challenges. For decades, the Maldives has been spending beyond its means, leading to a precarious fiscal situation that makes it particularly vulnerable to economic shocks. Faris H. Hadad-Zervos, the World Bank Country Director for the Maldives, Nepal, and Sri Lanka, emphasized the gravity of the situation on his official X account. He revealed that the Maldives’ annual debt servicing needs are projected to be $512 million for 2024 and 2025, escalating to $1.07 billion in 2026. This alarming projection comes shortly after the Maldives' Ministry of Finance reported that the public and publicly guaranteed debt has soared to almost 110% of the nation's GDP, amounting to $8.2 billion. The Maldives, heavily reliant on tourism, suffered significant economic setbacks due to the COVID-19 pande...
