Moody's has raised the Maldives' sovereign credit rating by one notch, from Caa2 to Caa1, and changed the outlook to stable.
The agency pointed to a lower risk of sovereign default after the successful settlement of the sukuk payments. The new rating returns the country to the level it held when the current administration took office. Moody's had cut it to Caa2 on 11 September 2024.
The upgrade comes with caveats. Moody's expects the budget deficit to widen to about 8 percent of GDP this year, and it does not expect the debt-to-GDP ratio to fall below 100 percent in the near term.
Caa1 is still a non-investment-grade, or speculative, rating, which keeps raising financing on international markets difficult. Finance Minister Hassan Zareer is pictured in the report that announced the decision.
