The Ministry of Finance and Planning’s latest Debt Bulletin shows public and publicly guaranteed (PPG) debt reaching MVR 148.9 billion at the end of the second quarter of 2025, equivalent to 124% of GDP.
Budgetary Central Government (BCG) debt accounted for the largest share, standing at MVR 127.8 billion, split between MVR 42.0 billion in external debt and MVR 85.8 billion in domestic debt. Domestic obligations remain dominant, making up 71% of GDP, while external debt represented 35%. Sovereign-guaranteed debt, extended to state-owned enterprises and private entities, stood at MVR 21.1 billion, or 17.6% of GDP.
Debt service costs continued to weigh heavily on public finances. In Q2 2025, total PPG debt service reached MVR 3.5 billion. Of this, MVR 1.9 billion went to principal repayments and MVR 1.6 billion to interest and other charges. Notably, domestic debt service costs surged, with interest payments rising to MVR 843 million.
External debt remained concentrated among a few creditors. The Export-Import Bank of India held the largest share, followed by bondholders, the Export-Import Bank of China, and the Saudi Fund for Development. In terms of currency composition, the majority of external debt was denominated in US dollars (64%), while other exposures included Saudi riyal, Kuwaiti dinar, Chinese yuan and euro.
The report highlighted refinancing risks, with large repayments looming in the medium term. Between 2025 and 2035, external and domestic obligations show a heavy concentration of maturities, exposing the government to rollover pressures.
On interest rate risk, the portfolio remains largely fixed-rate, with 96% of debt insulated from immediate rate shocks. However, the weighted average interest rate of PPG debt stood at 4.3%, reflecting a gradual rise compared with previous years.
Subsidiary loans to state-owned enterprises added another MVR 12.3 billion, led by the Maldives Airports Company Limited with MVR 9.8 billion. This continues to raise concerns over contingent liabilities, as repayments could fall back on the state if enterprises face difficulties.
Overall, the Q2 bulletin underscores the strain of high debt servicing costs and rising refinancing risks. While fixed-rate structures offer some protection, the sheer size of debt relative to GDP—124%—keeps fiscal vulnerability a pressing concern.
