MDP warns next year’s budget debt is unsustainable at 117% of GDP

Ahmed Sarwas Adam, a member of the opposition Maldivian Democratic Party’s Macro Economic Committee, has stated that the government’s proposed state budget for next year carries a higher debt ratio than this year and is not a sustainable approach. Speaking at an MDP press conference titled “Debt Increases, Services Decrease Budget 2027,” Sarwas, a former Chief Financial Budget Executive of the Finance Ministry and former member of the Pension Board, noted that next year’s budget targets direct debt at 117 percent of GDP, up from this year’s estimated 114.5 percent. He described it as the largest deficit budget from next year until 2029 and criticized the government for failing to take solid financial reform measures. Sarwas also highlighted that out of the 8.3 billion rufiyaa approved for the Public Sector Investment Programme, only 78 percent is expected to be spent, while oil subsidies and expenditures for government-share companies have exceeded budgeted amounts. He further noted that domestic debt is being taken three times more to cover repayments and that the government has not formulated or announced any fiscal targets, despite legal requirements. Sarwas stressed that the current level of debt is unsustainable and that targets should focus on reducing expenditures.