Ministry of Finance has revealed that expenditure on external debt in the first quarter of 2025 exceeded that recorded in any of the preceding 11 quarters.

As detailed in the Ministry’s latest quarterly debt bulletin, over MVR 2.2 billion was spent on basic external debt repayments between January and March. The bulletin, issued regularly each quarter, highlights a marked increase in the cost of fulfilling debt obligations when compared with recent years.

A closer examination of the figures shows that MVR 152.6 million was allocated for servicing loans obtained from donor countries. An additional MVR 468.6 million was spent on bias credit linked to import financing, while MVR 128.6 million went towards repayments to multilateral agencies. The largest single category of expenditure totalling MVR 1.5 billion was directed at repaying debt owed to private banks and financial institutions.

This surge represents the highest quarterly debt servicing cost recorded since the second quarter of 2022. During that period, the Government had also spent over MVR 1 billion on external debt.

Interest obligations further intensified the total debt burden during the review period. In the first quarter alone, MVR 349.2 million was spent on interest payments. This included MVR 41.3 million on donor country loans, MVR 160 million on bias credit, and MVR 63.1 million on multilateral loans. A further MVR 84.8 million was paid in interest to private banks, financial institutions, and businesses.

In total, external debt servicing for the quarter amounted to approximately MVR 2.6 billion. Cumulatively, the cost of servicing debt in 2025 has already surpassed MVR 5 billion.

Current projections indicate a repayment of USD 500 million by the end of this year. In 2026, that figure is expected to double, with the Government preparing to meet debt servicing costs amounting to USD 1 billion.