International credit rating agency Moody's has lowered Maldives' credit rating for the second time in two years.
Moody's last reduced the credit rating for Maldives in 2020 due to the economic decline caused by COVID-19.
Although tourists have begun arriving in Maldives and the economic activity has increased, the credit rating has been lowered from B-3 to CAE-1 as state debt has exceeded the projected amount.
Moody's predicts that state expenditure will continue to exceed over revenue. The agency also projects that although revenue from tourism has increased, it will take time for the rate of debt to drop.
While state debt is currently at 177 percent of national productivity, the agency believes that it will decrease to 107 percent of GDP in 2024.
Fitch, another credit rating agency, has also dropped Maldives' rating to CCC.