The Maldivian government has reaffirmed its commitment to meeting all its debt obligations following Fitch Ratings' downgrade of the Maldives’ Long-Term Foreign Currency Issuer Default Rating from ‘B-’ to ‘CCC+’. This downgrade, announced on June 26, 2024, is attributed to increased risks related to external financing and liquidity.
Fitch Ratings highlighted that the Maldivian government is expected to implement fiscal consolidation measures and reduce external financing requirements over the medium term. The government's dedication to reform was demonstrated by the Cabinet’s recent endorsement of the fiscal reform agenda, which aims to consolidate government expenditure and raise revenue to ensure fiscal and debt sustainability.
In their statement, Fitch indicated that a fiscal trajectory aimed at consolidating public debt levels could result in a positive or upward revision of current ratings. This, combined with commitments to economic diversification and increased resilience to external shocks, is expected to improve the likelihood of positive outcomes in future rating exercises.
Despite the downgrade, the Maldivian government remains confident that the robust economic outlook and the successful implementation of fiscal reforms will reflect positively in future rating reviews. The government emphasized that ensuring the financial stability of the nation remains a top priority.
Fitch Ratings highlighted that the Maldivian government is expected to implement fiscal consolidation measures and reduce external financing requirements over the medium term. The government's dedication to reform was demonstrated by the Cabinet’s recent endorsement of the fiscal reform agenda, which aims to consolidate government expenditure and raise revenue to ensure fiscal and debt sustainability.
In their statement, Fitch indicated that a fiscal trajectory aimed at consolidating public debt levels could result in a positive or upward revision of current ratings. This, combined with commitments to economic diversification and increased resilience to external shocks, is expected to improve the likelihood of positive outcomes in future rating exercises.
Despite the downgrade, the Maldivian government remains confident that the robust economic outlook and the successful implementation of fiscal reforms will reflect positively in future rating reviews. The government emphasized that ensuring the financial stability of the nation remains a top priority.
