President Ibrahim Mohamed Solih has said that he would not start any major project at this time by taking out additional loans.
Speaking at a press conference held at the President's Office on Wednesday, President Solih said the Maldives would also suffer the effects of the declining global economy. However, the speculations being spread regarding the Maldives' economic situation are untrue, he said.
The President said the Maldives lost MVR 70 billion in the last two years due to the COVID-19 pandemic, and an expected revenue of MVR 35 billion did not enter the state budget. He said he was forced to take out loans to keep the economy going at the time and urged not to spread untrue stories about the economic situation.
"These [statements] have raised concerns and have triggered anxiety in some people. It should be noted that some people are making such statements for political purposes. However, this [is a topic] should not be politicized," he said.
The President said he would not take out additional loans to start any major projects. However, projects that have already started with the loans, including the Thilamale' Bridge project and Gulhifalhu Port project would continue, would continue at speed, he said.
I have no intention of signing on another new major project and borrowing at this time. Projects will continue with existing loans. The net financing gap in the approved 2022 budget is about MVR 9.8 billion. This amount needs to be raised. Of that, we have already secured MVR 7.9 billion. We only need to raise MVR 2 billion more, and we are working towards that. The question is, what if we do not get it? In that case, we will have to stop some projects. [We will] reduce expenditure, and manage with what we have.Ibrahim Mohamed Solih | The President of the Republic
The President reiterated that the country's economy was headed in a good direction and that the country would not go bankrupt. He assured the people that the Maldives would be able to repay its debts.
The President also shared details of the growing debt and how it snowballed. The President said the government debt stood at MVR 17 billion as of 2012 and increased to MVR 23 billion by the end of President Mohamed Waheed's rule. At the end of the five years of President Yameen's rule, the figure stood at MVR 62 billion. While the previous government alone had created a debt of MVR 39 billion, the current government has so far generated MVR 37 billion as debt, he said.
The President said there were no difficulties in repaying the debt, and the next large amount would have to be paid in 2026. This gives enough time to prepare for the payment, he said.