Out of every MVR 100 earned by the state as revenue and grant aid next year, MVR 22 will be spent on debt repayment, according to the budget proposed by the Finance Ministry for 2024.
The government is expected to spend MVR 2.2 billion on debt repayments and MVR 5.2 billion on debt interest payments next year.
Direct public debt
The budget projected public debt to reach MVR 104.8 billion by the end of the year, up 15.5 percent from 2022.
With nominal GDP growth for the year estimated at 12 percent, the debt is expected to reach 98.4 percent of GDP this year.
The budget also projected direct public debt to reach MVR 117.8 billion by the end of 2024 with the direct stock of debt due to increase to MVR 138 billion by the end of 2026.
As a result, debt would reach 99.7 percent of GDP and the fiscal target of reducing the debt-to-GDP ratio to 95 percent by 2026 would not be met.
Guaranteed debt
Budget figures show that debt guaranteed by the state would decline by the end of 2023.
Guaranteed debt reached MVR 19.9 billion in 2020. But the amount is expected to fall to MVR 15.3 billion by the end of the year, which is 14.4 percent of GDP.
Guaranteed debt is expected to decline further in 2024 to MVR 13.2 billion or 11.5 percent of GDP, the budget showed.
Total public debt stood at MVR 106 billion by the end of 2022. It is expected to have increased during the year and reach MVR 120 billion by the end of 2023.
Total debt would be 112.8 percent of GDP by the end of the year and 114.3 percent of GDP in 2024, according to budget projections.
Grant aid
The budget estimated grant aid of MVR 1.2 billion in 2024, of which MVR 176.6 million was expected from India.
It is the largest amount of grant aid expected from one country during the year.
The second largest donor is expected to be the World Bank with MVR 142.2 million pledged as grant aid next year.
Grant aid of MVR 99.5 million from the Asian Development Bank (ADB) was also projected in the budget.
The main sources of grant aid stated in the budget were international banks and financial organizations.
