President Dr Mohamed Muizzu has stated that the biggest achievement of the past 52 weeks was changing the trajectory of the economy, without risking bankruptcy.
Speaking at the official ceremony marking one year since assuming office, the President reflected on the Administration’s efforts to address the country’s financial challenges. He noted that despite baseless accusations of economic mismanagement, the Government had taken decisive steps to reverse the economy’s downward trajectory.
He indicated that International Monetary Fund (IMF) advisory report on the Maldives was published six months before the current Administration assumed office. The report, he noted, indicated that Maldives’ debt sustainability was at risk and that the country was in imminent danger of a default. The report was initially to be released on November 23, 2022, he added.
At the time of assumption of office, President Dr Muizzu said the debt stood at over MVR 120 billion. The previous approach, he added, had been to circumvent the constitutional checks on budgetary spending and supplementary budget, with this pattern observed over the previous five years.
The citizens, the President said, had trusted the “Dhivehinge Raajje” manifesto and taken it up to change the trajectory of the nation. As such, by November 17, 2023, there was a total of MVR 8.4 billion in Public Accounts overdrafts. This, he said, had led all international financial institutions to speculate that Maldives could default by April 2024.
President Dr Muizzu said that this concern was not a baseless one, as the interest payments on loans taken had increased to MVR 4.2 billion in 2023 from MVR 1.4 billion five years before.
Referring to the economic status one year back, the President said the country had to spend MVR 24 out of every MVR 100 on debt servicing; of which, MVR 16 out of every MVR 100 was interest payments.
Despite these factors, President Dr Muizzu stated that the Administration, in the past 52 weeks, had been successful in reversing the trajectory of the economy, averting a default. This, he said, was evident from economic figures and indicators.
The President said the budget for 2025 was the first ever budget of the Administration that would be passed by the Parliament and implemented. The budget for 2024 was passed by the previous administration and a Parliament that was closely aligned with the previous administration, and as such, current Administration did not have full autonomy over this year’s budget. This, he said, was a direct attempt against the present administration, indicating that even though developmental projects were included in the budget, the working budget granted to those projects was not sufficient. Despite this challenge, the President noted that significant work had been carried out in the year.
