According to the latest Weekly Fiscal Developments report published by the Ministry of Finance, the Maldives government’s expenditure rose by MVR 756 million as of November 28 this year compared to the same period in 2022, despite delays in several Public Sector Investment Programme (PSIP) projects due to financial constraints. Total spending reached MVR 45 billion, up from MVR 44 billion last year.
The increase in expenditure comes alongside a notable decline in capital spending. Figures from the report reveal a reduction of MVR 456 million in capital expenditure, with spending on PSIP projects dropping significantly by MVR 1.4 billion. These reductions highlight ongoing challenges in advancing development initiatives under constrained financial conditions.
However, other areas of government spending have risen. Recurrent expenditure, covering the government’s operational costs, increased by MVR 1.2 billion. This rise is largely attributed to higher salaries and allowances for government employees, which totalled MVR 12.3 billion in 2023, an increase of MVR 1.4 billion from MVR 10.9 billion in 2022. Loan repayments also rose by MVR 82 million during the period.
Revenue and grants for the year so far total MVR 31.1 billion, sufficient to cover recurrent expenses, which amount to MVR 30 billion. The revenue increase of MVR 709 million was primarily driven by stronger tax collections. However, this growth in income was insufficient to offset the rise in expenditure, widening the budget deficit to MVR 11.7 billion as of late November.
With an approved budget of MVR 49.9 billion for 2023, the government has already utilised MVR 45 billion, leaving little fiscal room for additional spending in the final weeks of the year. The data underscores the financial pressures facing the Maldives as it navigates a widening budget gap and delays in development investments.
