The Managing Director of State Electric Company Limited (STELCO), Hussain Fahmy, has praised the Government’s efforts in addressing the Maldives' risk of default and stabilising the nation’s economic outlook.

In a statement shared via his official X account, Fahmy noted that international financial institutions had previously raised concerns about the Maldives' potential risk of default. He credited President Dr Mohamed Muizzu’s decisive leadership and effective measures for tackling these economic challenges.

Earlier in 2024, Moody’s downgraded the Maldives' credit rating from Caa1 to Caa2 due to concerns surrounding foreign exchange reserves, trade and budget deficits, and delays in implementing fiscal reforms. However, in December 2024, Moody’s opted to maintain the September rating of Caa2, citing continued access to bilateral financing, new foreign currency regulations introduced by Maldives Monetary Authority (MMA), and the Government’s ongoing revenue reform initiatives.

The World Bank, in its projections, noted that the timely implementation of the Government’s fiscal reform package would narrow the fiscal deficit from 12.7 per cent of GDP in 2023 to 6.1 per cent by 2026. Correspondingly, public debt is projected to decline gradually from 122.8 per cent in 2023 to 111.4 per cent by 2026.

The Government has implemented significant reforms to enhance fiscal stability and stimulate economic growth. These include modifications to the Aasandha scheme, which are anticipated to cut annual spending by MVR 220 million, and revisions to the Foreign Currency Act. The updated foreign currency regulations aim to improve the flow of foreign currency within the domestic banking sector and bolster the nation’s net international reserves.