IMF forecasts Maldives as world's 8th most indebted country

IMF forecasts Maldives as world’s 8th most indebted country

Mohamed Ahmed

July 28, 2026

The International Monetary Fund (IMF) has forecast that by the end of this year, the Maldives will be the eighth most indebted country in the world relative to GDP.

In its Economic Outlook report released in April, the agency said the Maldives’ debt will reach 129.4 percent this year. With this figure, the Maldives will remain the most indebted country in South Asia. Among all countries included in the report, the Maldives ranks eighth on the list of the ten most indebted nations — behind Japan in first place at 204.4 percent, followed by Singapore (171.9%), Sudan (169.1%), Bahrain (152.4%), Italy (138.4%), Greece (136.9%) and Senegal (132.3%). Ranked below the Maldives are the United States (125.8%) and Ukraine (122.6%).

According to IMF data compiled since 1997, Maldivian debt peaked during the Covid-19 pandemic in 2020 at 155.7 percent. After falling in 2021 and 2022, it rose to 122.4 percent in 2023, and then to 133.3 percent in 2024, the final year before the presidential election. Although it dropped to 125.4 percent last year, the IMF projects the ratio will climb again this year.

Notably, last year and again in January of this year, the IMF had forecast that the Maldivian economy would grow by four percent or more in 2026. However, following the war launched by the United States and Israel against Iran on February 28, which rattled the global economy, the IMF has lowered that projection to three percent. This is a sharp decline compared to the five percent growth the Maldivian economy recorded last year.

In a statement issued after an IMF team visited the Maldives from the 4th to the 14th of last month to review the country’s economic situation, the agency said that despite the adverse effects of the Middle East war on tourism and the wider economy, there is hope the economy will grow by 4.6 percent next year if sound policies are maintained. However, the IMF urged the government to cut spending by targeting subsidies only to those who need them, reforming state-owned enterprises, and investing in renewable energy to reduce fuel expenditure.

It is worth noting that the state passed a record-sized budget this year. The main reason is that a total of $1.1 billion in debt accumulated over previous years must be repaid in 2026.