The Maldives recorded a budget surplus of MVR 1.05 billion as of 17 July 2025, according to the Ministry of Finance’s latest Weekly Fiscal Developments report. The surplus comes against the backdrop of robust revenue growth and subdued capital expenditure, painting a complex fiscal picture midway through the year.
Cumulative revenue and grants reached MVR 20.5 billion by mid-July, outpacing the MVR 19.5 billion in recorded expenditure. Tax revenue remains the primary contributor, accounting for 76 percent of the total, followed by non-tax revenues at 23 percent and grants at just 1 percent. A notable rise in import duties and Green Tax collections helped boost government income.
Despite the headline surplus, the report reveals a slowdown in capital spending. Only MVR 2.3 billion in capital expenditure has been recorded so far this year, a sharp drop compared to the same period in 2024. Recurrent expenditure, however, remains steady, totalling MVR 17.2 billion, with MVR 7.2 billion going toward salaries, wages, and pensions.
The Public Sector Investment Programme (PSIP) has seen sluggish disbursements. Only MVR 2.2 billion out of the MVR 12.4 billion allocation has been utilised, with infrastructure development, renewable energy projects, and water and sewerage systems among the areas falling behind. In particular, expenditure on transport infrastructure and land reclamation projects has slowed, raising questions about implementation delays.
Meanwhile, the largest budget allocations continue to go toward the Ministry of Construction, Housing and Infrastructure, the Ministry of Education, the National Social Protection Agency, and the Maldives Police Service. However, some agencies such as the Ministry of Housing, Land and Urban Development have yet to record any expenditure at all.
The financing side of the budget also reflects high loan repayments and growing transfers to the Sovereign Development Fund (SDF), both of which absorb significant fiscal resources. So far, MVR 3.3 billion has been spent on loan repayments and MVR 1.1 billion transferred to the SDF.
While the overall fiscal balance appears healthy on paper, the low execution rate of development projects could pose challenges in meeting public expectations and economic targets. With just over five months remaining in the fiscal year, pressure is likely to mount on implementing agencies to fast-track disbursements and improve project delivery.
