The debt to GDP ratio stood at 111 percent by the end of 2022, Finance Minister Ibrahim Ameer has said.
Maafannu Central MP Ibrahim Rasheed inquired from the minister the debt-to-GDP ratio for 2021 and the projected debt-to-GDP ratio for 2022. The inquiry, asking for a written response, was received by the Parliament Office on September 26, 2022, and the relevant section received the notice to question cabinet ministers on September 28, 2022. The response sent by the Finance Ministry on October 25 was received by the Parliament office on November 6 and was read out at today's Parliament sitting.
The minister's reply from last year predicted that the debt-to-GDP ratio would stand at 111 percent at the end of 2022. That is 98 percent of the debt taken by the state and 13 percent of guaranteed debt. The debt-to-GDP ratio of direct debt and guaranteed debt was 118 percent at the end of 2021, which is 100 percent direct debt and 18 percent guaranteed debt.
According to Ameer, debt restructuring causes rating agencies to downgrade the government's selective default rating, he said. As a result, the state and local businesses have difficulty in securing funds from abroad, he said. Therefore, the best way to get the government debt back on track is to reduce government expenditure and increase revenue, he said.