Former Finance Minister Ibrahim Ameer has warned that the state’s debt will surpass MVR 155 billion by the end of 2024, pointing out a significant mismatch between the debt and interest expenses projected in the 2025 budget.

He made these remarks during a press conference held by the main-opposition Maldivian Democratic Party (MDP) on Thursday.

Speaking at the presser, Ameer shared detailed information about the budget proposed by the government for 2025.

Ameer said that by the end of the ongoing year, the state debt will exceed MVR 155 billion.

Highlighting that the 2025 proposed budget estimates the total state debt to be MVR 150 billion by the end of next year, Ameer said that the USD 400 million currency swap taken from India in October is not reflected in the debt calculations.

He also said that by the end of 2023, the total state debt was MVR 124 billion and after one year of President Dr. Mohamed Muizzu's administration, the debt has increased by MVR 20 billion, bringing the total debt to MVR 145 billion.

Ameer said that based on the debt trajectory, it is expected that the debt will increase by 15 to 20 billion annually, and it is estimated that by the end of the ongoing five-year presidential term, the total debt will increase to MVR 220 billion.

Highlighting that the debt and interest expense in the 2025 budget do not match, Ameer said that 60 percent or USD 765 million of the funds needed to finance the 2025 budget is set to be obtained through foreign loans.

He said that out of this, USD 432 million are set to be obtained from foreign commercial banks.

However, shedding light on the interest expense in the budget, Ameer said that it appears that the loans taken from commercial banks are set to be paid at the U.S. Federal Reserve's Fed Funds Rate, which Ameer said is concerning.

Ameer said it remains unclear how they decided that loans would be available from commercial banks at concessional interest rates, adding that such rates are usually provided by institutions like the IMF and World Bank, especially when entering programs.

The former finance minister stressed that if the government has such a plan, it should be clarified to the public.

Further, he said that as the government's financing plan has failed so far, there is no certainty that funds can be secured for this budget.