One of the world’s largest credit rating agencies, Fitch Ratings having upgraded Maldives Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B-' from 'CCC' is a “huge achievement”, says Minister of Finance Ibrahim Ameer.
Fitch publicized a report on Thursday, revealing that Maldives currently rates ‘B-‘; Outlook Stable, which reflects a “stronger” recovery for the country’s tourism industry than was previously anticipated as well as an “improved, though still challenging refinancing outlook for the sovereign's external debt over the next few years.”
Taking to Twitter following the publication of the report, the Maldivian finance minister revealed that the government of Maldives “welcomes the current ratings upgrade by fitch” which underscores the “positive” developments in regards to the economic performance and debt management.
Thereportby Fitch indicates that the Maldives’ economy is expected to grow by 29.4 percent in 2021 and 10 percent in 2022
Minister Ameer went on to state that the Maldivian government has managed to take care of short-term liquidity risk in a pro market manner with the recent Sukuk issuance and subsequent tender offer.
Highlighting that debt to GDP is expected to “improve” as the economy grows, Minister Ameer stated that the government currently focusses on diversifying the economy, increasing tourism bed capacity and investing in infrastructure projects that contribute to higher economic growth.
Further, he noted that the fiscal deficit is expected to gradually narrow with fiscal consolidation measures, adding that the focus is on “growth” rather than “painful austerity measures” that may draw out the economic crisis
Expressing gratitude to relevant stakeholders, Minister Ameer said that there is still more work to do.
The Fitch report reveals that tourist arrival figures of 2021 have “rebounded sharply” to around 70 percent of pre-pandemic levels and the number of bed nights has also recovered, “even faster” with tourists on average “tending to stay around three days longer than in the past.”
Fitch anticipated tourist arrivals to further normalize to over 80 percent of pre-pandemic levels during the next year, and to around 100 percent in 2023.
