The Maldives government’s financial report for the period ending 24 October 2024 reveals a persistent budget deficit, with expenditure outpacing revenue. Cumulative revenue and grants during this period totalled MVR 28,200.4 million, while cumulative expenditure amounted to MVR 37,735.1 million, resulting in a deficit of MVR 9,534.8 million.
Revenue Composition
Revenue sources were primarily composed of tax revenues, which constituted the largest share, at MVR 21,483.5 million. Key contributors included Goods and Services Tax (GST) and Business and Property Tax, which collectively sustained much of the revenue base. Tourism Goods and Services Tax provided a significant boost, reflecting the reliance on the tourism sector as a principal driver of income. Non-tax revenues, totalling MVR 6,185.5 million, showed a slight decrease, reflecting reductions in dividends from state-owned enterprises and lower property income.
Expenditure Overview
Total government spending for the period reached MVR 37,735.1 million, dominated by recurrent expenditure (72%) compared to capital expenditure. Recurrent costs, largely made up of salaries, wages, and operational expenses, accounted for MVR 27,244.5 million. In capital expenditure, notable investments were observed in infrastructure and land development projects, indicating a prioritisation of long-term national development initiatives.
Capital Projects and Development Focus
Infrastructure projects remained a focal point of capital expenditure, particularly in sectors like transportation, environmental protection, and housing. The transport sector alone saw MVR 2,808.1 million in allocations, underscoring government efforts to expand and improve critical infrastructure such as ports and airports. Investment in environmental initiatives reached MVR 736.4 million, aimed at coastal protection and renewable energy.
Public Sector Investment Program
The government allocated MVR 7,909.7 million to the Public Sector Investment Program, addressing national security, health, education, and social services. Despite significant budgetary allocations, these sectors saw varied utilisation rates, reflecting a need to improve the efficiency of fund deployment across essential services.
Debt Obligations and Financing
The report also highlights outstanding government securities, with total debt standing at MVR 88,560 million. Treasury Bills, accounting for a substantial portion, reflect the government’s ongoing reliance on short-term debt instruments to meet immediate financing needs. Long-term sustainability remains a key concern, given the balance between servicing existing debt and financing development priorities.
The Maldives government’s fiscal position illustrates the challenges of balancing revenue generation with essential expenditures. While tourism-related revenue has bolstered the income stream, the dependency on short-term debt and high recurrent costs continues to exert pressure on the budget. As the government pursues infrastructure and social sector investments, effective resource allocation and sustainable revenue strategies will be essential to address the deficit and support long-term economic stability.
