The Maldives government expects to reduce its reliance on domestic financing by 37 percent in 2027, according to figures outlined in the proposed state budget presented to Parliament.
The budget forecasts MVR 11.9 billion in domestic financing for next year, compared with approximately MVR 19.2 billion in 2026.
Finance Minister Hassan Zareer presented the budget to the People’s Majlis on Thursday, outlining plans to reduce domestic borrowing while increasing the amount of financing obtained from international sources.
Overall financing requirement to fall to MVR 18.9 billion
The government estimates that MVR 18.9 billion will be required to finance the 2027 budget, down from MVR 24.6 billion in 2026.
This represents a projected reduction of 23.3 percent in the overall financing requirement.
According to the budget figures, domestic financing for 2026 was estimated at MVR 19.2 billion. This included MVR 12.9 billion from government securities, MVR 973 million in repayments on loans previously issued by the government, and MVR 5.39 billion from the Sovereign Development Fund (SDF).
Domestic borrowing expected to decline
The proposed budget projects MVR 8.6 billion in domestic borrowing for 2027, compared with MVR 12.9 billion in 2026, representing a reduction of 32.6 percent.
The government also anticipates reducing the amount drawn from the Sovereign Development Fund.
Withdrawals from the fund are projected at MVR 2.36 billion next year, a 56.2 percent decline compared with the MVR 5.39 billion estimated for 2026.
External financing set to increase
While domestic financing is expected to decline, the government plans to increase funding obtained from external sources.
The 2027 budget projects MVR 6.9 billion in external financing, compared with MVR 5.3 billion estimated for 2026.
A significant portion of the planned external financing is expected to come from the issuance of bonds and sukuk in international markets.
The budget includes MVR 2.6 billion in expected proceeds from these instruments in 2027. According to the report, the government did not raise funds through external bond or sukuk issuances in either 2025 or 2026.
In addition, the government projects MVR 2.35 billion in external loans and MVR 1.89 billion in budget support financing.
The proposed financing arrangements indicate a shift towards reduced reliance on domestic sources, alongside increased use of external funding to meet the government’s budgetary requirements.
