President Yameen Abdul Gayoom said on Monday that his government borrowed MVR 4.79 billion, to fund its development projects.

In his first address to the nation this year, President Yameen said that his government had withdrawn five loans totaling MVR 4.79 billion in 2016, and that it seeks to borrow more as foreign aid in the future. 

Further, he added that, as part of its efforts to supplement the economy and see it grow, the government disbursed 56 new investments outside of tourism. He expects a mark-up of MVR 1.5 billion on said investments in five years.

The President claimed that the economy had expanded last year by 3.9 percent, and was confident of a stronger growth this year, placing the estimate at 4.7 percent.

He put the inflation rate last year below zero – at 0.4 percent. President Yameen said that his government gives unrelenting priority to keep the rate lower than two percent.

The economy saw an income of up to MVR 18.1 billion, while having spent MVR 22.4 billion.  According to President Yameen, the government estimates for 2017 are more favorable - an income of MVR 21.9 billion, and an expenditure of MVR 22.1 billion.

He added that the budget deficit had been reduced to 303.7 billion, and primary surplus was at 1.1 billion. He stated that projected deficit for this year would be 0.5 percent of total productivity. GDP per capita, according to the President, was USD 8,063.

While President Yameen’s address guarantees even further borrowing this year, the World Bank had released a debt sustainability report on the Maldivian economy which cautioned the state against debt accumulation in what the Bank described debt percentages that grow significantly every year. In its report. the Bank placed its focus primarily on the public debt having exceeded the nation’s GDP.

Its analysis reports that the Maldives’ public debt at the end of 2015, was 73.1 percent of the GDP, was expected to rise 83.1 percent in 2016, and 109 percent by 2018. This report further stated that, in the next four years, the local debt per capital would rise to 120 percent – at MVR 140,000.

“Overall Maldives is judged to face a moderate risk of external debt distress, based on an assessment of public external debt, but a heightened overall risk of public debt distress, reflecting the significant and high vulnerabilities related to domestic debt” the report said.