Maldives Monetary Authority (MMA) on Wednesday revealed through their 2017 annual report the island nation's external debt increased by 26% from previous year's figures, hitting MVR 1.1 billion.
According to MMA based on the latest available statistics the total external debt stock (government and commercial banks) "increased by USD 339.4 million and summed to USD 1.2 billion" at the end of 2017.
The debt to GDP (Gross Domestic Product) ratio increased to 26% of the GDP in 2017 which is a 20% bump from the preceding year.
The MMA explained in their annual report regarding the growth in the external debt and the debt-to-GDP ratio as it read "the growth in the external debt stock broadly reflected an increase in government debt securities following the issuance of a government bond in the international market during the year."
Another key reason behind the debt growth is the increase in buyer's credit along with an increase in loans obtained from multilateral sources during the year.
Furthermore MMA said "the composition of total outstanding external debt stock, government external borrowings - which accounted for 91% of the total external debt stock - grew significantly by USD 316.2 million and totalled USD 1.1 billion at the end of 2017."
MMA explained the debt securities grew significantly with the "newly issued government bond of USD 250 million." Buyer's credit recorded substantial growth of USD 72.8 million and eventually amounted to USD 420.9 million at the end of 2017. Multilateral loans amounted to USD 274.5 million which is a 20% increase from 2016 figures.
However bilateral loans registered a decline of USD 20.6 million which eventually reached to USD 122.1 million while the "foreign liabilities of commercial banks totalled USD 108.1 million in 2017, a growth of USD 23.2 million."
However bilateral loans registered a decline of USD 20.6 million which eventually reached to USD 122.1 million while the "foreign liabilities of commercial banks totalled USD 108.1 million in 2017, a growth of USD 23.2 million."
With the increase of government external borrowing, the total cost of debt servicing rose by USD 5.5 million and amounted to USD 86.9 million in 2017 while the debt service ration remained unchanged with 2.6% as of 2016 onward.
