The Maldives' domestic debt is projected to surpass MVR 100 billion by the end of this year, according to budget documents submitted to the People's Majlis.
Finance Ministry records indicate that domestic debt stood at MVR 98.9 billion earlier this month. Forecasts in the 2027 budget place the year-end figure at MVR 101.3 billion, rising further to MVR 108.1 billion by the close of next year.
When the current administration assumed office, domestic debt was MVR 68.1 billion. The increase of more than MVR 30 billion within roughly three years reflects heavy reliance on the local market to cover financing gaps. So far this year alone, domestic borrowing has already exceeded the full-year totals of the previous two years.
The highest volume of new domestic issuance occurred in the second quarter, coinciding with a sukuk repayment. Officials have noted that banks, the pension fund, and state-owned enterprises remain the primary purchasers of government securities.
Economists have cautioned that sustained high levels of domestic borrowing can tighten liquidity for private-sector lending and create closer links between the banking system and public finances. The government maintains that the borrowing is necessary to fund essential expenditure and infrastructure while external financing remains constrained.
The 2027 budget presentation also outlined other fiscal measures. Parliament is expected to review the proposals in the coming weeks. Analysts will monitor whether the trajectory of domestic debt continues or moderates as revenue measures take effect.
