The Ministry of Finance and Planning’s latest Weekly Fiscal Developments, published on 23 September, shows the government recording a surplus of MVR 741.2 million as of 18 September 2025. While the headline figure suggests stability, recent months have shown a recurring pattern: surpluses that stem less from buoyant revenues and more from sluggish capital spending.
Cumulative revenue and grants stood at MVR 27.4 billion by mid-September, still trailing the projected MVR 39.8 billion for the year. Tax revenues continue to anchor collections, with Tourism Goods and Services Tax generating MVR 7.6 billion so far, highlighting the resilience of the tourism sector. Yet grants remain negligible at MVR 212.8 million compared to an approved budget of MVR 2.6 billion, pointing to challenges in securing pledged external support.
Expenditure tells the more revealing story. Spending reached MVR 26.6 billion against an approved budget of MVR 49.2 billion. Recurrent expenditure, which covers salaries, pensions, subsidies and Aasandha payouts, is broadly on track at MVR 23.1 billion. But capital expenditure has reached only MVR 3.5 billion out of a planned MVR 12.6 billion, highlighting a persistent execution gap.
Key infrastructure sectors illustrate the shortfall. Housing, a politically sensitive area, has seen just MVR 136 million spent from a budgeted MVR 1.8 billion. Land reclamation has reached MVR 361 million compared to nearly MVR 2 billion allocated. Roads, ports and airports are consuming funds, but at a slower pace than planned. The pattern signals that large-scale development promises are struggling to move from plan to delivery.
This repeated underspending has created short-term fiscal breathing space but at the expense of long-term growth. The surplus reduces immediate borrowing pressure, yet it conceals the fact that financing costs are rising, with interest payments already at MVR 3.3 billion this year. Government securities outstanding stand at MVR 96.1 billion, dominated by short-term Treasury bills, which heightens rollover risks.
The persistence of surpluses in recent months is therefore less a sign of fiscal strength than a reflection of delays in implementing the Public Sector Investment Programme. As projects stall, infrastructure delivery slows and the intended economic multipliers are lost, leaving the country vulnerable to both external shocks and growing debt service costs.
Without a shift to accelerate capital execution in the final quarter, 2025 may close with a balance sheet that looks healthy on paper but leaves much of the government’s development agenda unfulfilled.
