![\"Maldives](\"https:\/\/c.ndtvimg.com\/2024-01\/o7415eug_maldives-generic-facebook_625x300_09_January_24.jpeg\"\/ "\\"Maldives")
<\/div>\nMaldives President thanked China last month for its “selfless assistance”<\/p>\n<\/div>\n
The strategically-placed Indian Ocean nation of the Maldives, which has borrowed heavily from China and shifted allegiance from India, is at high risk of “debt distress,” the IMF warned Wednesday.<\/p>\n
Beijing has pledged more funding for the Maldives since pro-China President Mohamed Muizzu took power in November.<\/p>\n
Muizzu thanked China last month for its “selfless assistance” for development funds after a visit to Beijing.<\/p>\n
The International Monetary Fund did not give details of the Maldives’ foreign debt but said there was a need for “urgent policy adjustment”.<\/p>\n
“Without significant policy changes, the overall fiscal deficits and public debt are projected to stay elevated,” the IMF said after a review of the country’s economy.<\/p>\n
“The Maldives remains at high risk of external and overall debt distress”.<\/p>\n
The archipelago, famed for its white sand beaches and where tourism accounts for nearly a third of the economy, has recovered economically from the Covid-19 pandemic.<\/p>\n
But while a planned airport expansion and an increase in hotels are projected to boost growth, the IMF said “uncertainty surrounding the outlook remains high and risks are tilted to the downside.”<\/p>\n
Muizzu’s mentor, former president Abdulla Yameen, who ruled for five years until 2018, borrowed heavily from Beijing for construction projects.<\/p>\n
That left it owing 42 per cent of its more than $3 billion foreign debt to China in 2021, according to the World Bank, citing the Maldives’ finance ministry.<\/p>\n
Muizzu, who has requested that Indian troops operating three reconnaissance aircraft in the Maldives leave by May 10, has vowed to strengthen his military to defend the country’s vast maritime territory.<\/p>\n
Global east-west shipping lanes pass through the nation’s chain of 1,192 tiny coral islands, stretching around 800 kilometres across the equator.<\/p>\n
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)<\/i><\/p>\n<\/div>\n