Credit rating agency Moody’s has lifted the Maldives’ outlook from Caa2 negative to stable, a decisive endorsement of President Dr Mohamed Muizzu’s sweeping fiscal and economic reforms that have begun restoring stability after years of financial strain.
The Ministry of Finance said the upgraded outlook is a direct result of the President’s disciplined policy agenda, which has reversed the unsustainable spending patterns inherited from previous administrations. Moody’s noted that the government’s decisive reforms have strengthened reserves, stabilised liquidity, and placed the Maldives back on a path of responsible economic governance.
At the core of this turnaround is President Muizzu’s commitment to rebalancing state finances. Since 2024, his administration has introduced targeted tax adjustments on airport charges, the green tax, and TGST to boost foreign currency revenue. Moody’s highlighted that the enforcement of foreign currency regulations under his leadership has increased reserves and improved the state’s repayment capacity.
The most striking improvement is seen in the Sovereign Development Fund. Under President Muizzu’s policies, the foreign currency balance surged from USD 15 million last year to USD 126 million by 9 November 2025. Moody’s described this achievement as a clear marker of renewed financial discipline, noting that the government is now better equipped to meet major external obligations, including the USD 500 million sukuk repayment due in 2026.
Despite these major policy shifts, the Maldivian economy continues to grow strongly. Tourism, the nation’s largest economic engine, has flourished under the President’s pro growth agenda, with arrivals up 10 percent and bed nights rising 7.2 percent by September compared with last year. Moody’s said this resilience reflects investor confidence and stability in the broader economic environment.
The medium term budget for 2026 to 2028, shaped under President Muizzu’s vision, charts a clear path to reduce the deficit and lower debt as a share of GDP. The administration plans to settle annual external debt repayments through the reinforced Sovereign Development Fund, restoring the Fund’s intended purpose and ensuring long term sustainability.
Moody’s also highlighted the Maldives’ renewed ability to secure external financing through bilateral partners, describing it as evidence of trust regained through President Muizzu’s transparent and reform oriented fiscal management.
With the global credit agency now acknowledging the strength of these reforms, the Ministry affirmed that President Muizzu will continue steering revenue and expenditure policies toward macroeconomic stability and durable debt sustainability, ensuring that the Maldives emerges stronger, more resilient, and better prepared for future growth.
