IMF's 'debt crisis' warning amid Maldives' growing ties with China

Despite strong post-pandemic growth, the Maldives remains at high risk of debt distress, the International Monetary Fund (IMF) has warned.

“Without significant policy changes, the overall fiscal deficits and public debt are projected to stay elevated, and the Maldives remains at high risk of external and overall debt distress,” the IMF said, calling for “urgent policy adjustment”. The assessment echoed the World Bank’s earlier assessment, of the fiscal strain facing the Indian Ocean archipelago.

Acknowledging the challenge, President Mohamed Muizzu recently told parliament that his government would adopt reform policy to improve the country’s finances and bring debt and fiscal conditions to sustainable standards.