The Maldivian government inherited significant external debt associated with the infrastructure spending boom under Mr Yameen. The servicing of this debt is one of the prime reasons for the country's persistent budget deficit. We expect the shortfall in the budget to narrow slightly, to the equivalent of 10.4% of GDP in 2021, from an estimated 16.3% in 2020, on account of higher government receipts and lower spending on public-investment programmes, as the economy stages a recovery. Grants and loans received by the Maldivian government from other countries and multilateral donors will help partially to cover the fiscal shortfall in 2021. However, the loans received to date will push up the country's debt/GDP ratio.