Credit rating gains point to very bright days ahead: Zareer

Finance Minister Hassan Zareer has said very bright days lie ahead following the Maldives' credit rating gains.

Moody's, the world's largest credit rating agency, this month upgraded the Maldives' credit rating from 'Caa2' to 'Caa1' and its economic outlook to 'stable'.

One reason cited for the credit rating upgrade was the substantial reduction in the risk of a near-term debt default, following the government's repayment of large debts and steps to ensure financial stability.

Speaking last night at the 'Ahaa' forum, jointly organised by the President's Office and state broadcaster PSM, Zareer said the current government had so far repaid USD 1.142 billion in debt, with the largest share paid this year. He said this achievement would help ease pressures in the period ahead.

Zareer said the year had begun very well, with government revenue in the first quarter increasing by 10 percent compared with the first quarter of last year.

However, he said the Maldives had been severely affected by changes in oil prices, global logistics and international travel resulting from the war that began in the Middle East in April this year.

He said that although MVR 2.9 billion had been allocated for subsidies in this year's budget, subsidy payments had risen to MVR 4.3 billion as the government sought to keep fuel prices steady amid the war.

Zareer said that despite these challenges, signs of hope were beginning to emerge from efforts to steer the economy in the right direction.

"In the past few days, we have heard about further improvements in the state's credit rating and the Maldives' credit rating. Yes, I noted that this is an achievement that we recognise as very significant, and one that other countries and international financial institutions also recognise as very significant. So we see very bright days ahead," Zareer said.