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Maldives - Joint World Bank-IMF Debt Sustainability Analysis (English)

The Maldives continues to be at high risk of debt distress. As in the 2019 Article IV debt sustainability analysis (DSA) published on June 2019, all indicators except the debt-to-exports ratio breach their respective thresholds under the baseline scenario but they display medium-term downward trends. In response to the shock to the economy caused by the Coronavirus 2019 (COVID-19) outbreak, the authorities have taken steps to reduce non-priority recurrent and capital spending as well as rebalance the distribution of available resources. Given the changes in domestic and global conditions, the authorities have committed to reprioritize and cut capital expenditures which are projected to decline in the next few years, helping to put debt on a decreasing path. Rollover risks from the repayment of two outstanding international sovereign bonds are mitigated both by the sovereign development fund (SDF) and by the preemptive voluntary extension of a privately placed United States (U.S.) 100 million dollars bond due in 2023 (now due in 2026). Thus, staff judge public debt in Maldives to be sustainable. This assessment of debt sustainability is predicated on the implementation of the authorities’ stated policies which are substantial and require a high level of commitment. Updates of the economic impact and policy response to the COVID-19 crisis are rapidly evolving and risks are heavily tilted to the downside.

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Maldives - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/293831592861168276/Maldives-Joint-World-Bank-IMF-Debt-Sustainability-Analysis