The Maldives recorded a budget surplus of MVR 1.36 billion as of 19 June 2025, despite subdued government spending on capital projects. According to the Ministry of Finance’s latest Weekly Fiscal Developments report, the government collected MVR 17.6 billion in revenue and grants while spending MVR 16.2 billion over the same period.
The report shows a sharp contrast between revenue growth and expenditure utilisation, particularly in capital projects. Of the approved MVR 49.2 billion expenditure for the year, only MVR 16.2 billion had been utilised by mid-June. This equates to just under 33 percent of the full-year allocation. The underperformance is especially stark in capital expenditure, where less than 13 percent (MVR 1.6 billion) of the budgeted MVR 12.6 billion has been disbursed.
In contrast, recurrent spending remained on track, totalling MVR 14.6 billion so far. Salaries, wages and pensions alone accounted for over MVR 6 billion, while administrative and operational expenses reached MVR 8.5 billion. Interest payments and grants added further weight to the current expenditure figures.
Tax revenues remain the main contributor to state income, accounting for 77 percent of total revenue collected. Goods and Services Tax (GST) led this segment, with tourism-related GST alone bringing in MVR 5.7 billion by June. Non-tax revenues totalled MVR 3.9 billion, with significant contributions from airport development fees and resort rents.
The slow pace of capital spending is particularly notable across major infrastructure and development projects. Public Sector Investment Programme (PSIP) execution stood at just MVR 1.6 billion out of an annual target of MVR 12.4 billion. Key sectors like transport, housing, water and sanitation, and education saw minimal disbursement compared to their approved budgets.
Among the agencies, the Ministry of Construction, Housing and Infrastructure, which commands the largest capital budget, had only spent MVR 1.2 billion out of an allocated MVR 8 billion. Similarly, the Ministry of Housing, Land and Urban Development, which was dissolved in December 2024, reported zero utilisation for the year.
While the surplus may appear positive at first glance, it reflects a deeper issue of delayed project execution. Low disbursement levels in capital infrastructure could signal administrative bottlenecks, procurement delays or a broader slowdown in public investment.
The primary balance, which excludes interest payments, stood at MVR 3.44 billion, reinforcing the observation that fiscal space exists but is not yet being actively utilised for development.
Unless capital spending picks up pace in the second half of the year, the government risks missing critical infrastructure timelines, which could in turn dampen economic momentum and public service delivery.
