The government is preparing a targeted cost-cutting plan as fiscal pressures persist, with rising external risks expected to widen the Maldives’ budget deficit.
Finance Minister Moosa Zameer has indicated that a special set of expenditure-reduction measures is being developed for submission to President Mohamed Muizzu. The plan is expected to identify key sectors where spending can be reduced without affecting essential services.
According to the minister, steps to control expenditure have already been implemented within the current budget framework. While the deficit has narrowed compared to levels recorded over the past five years, it remains significant at USD 389.1 million. Ongoing geopolitical developments, particularly the conflict in the Middle East, are expected to increase fiscal pressures, with projections suggesting the deficit could rise to USD 518.8 million.
The proposed plan focuses primarily on reducing recurrent expenditure. Areas under review include government hiring and other operational costs, as authorities assess where savings can be achieved. The minister noted that a list of proposed changes has been prepared and will be submitted to the President for consideration, with implementation expected to follow based on further guidance.
Authorities have also begun introducing immediate cost-containment measures. Overseas travel by government officials has been suspended, with institutions encouraged to participate in meetings virtually wherever possible. Exceptions have been made in cases where travel is required to carry out official responsibilities, particularly in the foreign affairs sector.
The minister stated that fiscal adjustments will be approached with caution, noting the need to balance expenditure reductions with potential impacts on revenue and financing. Despite the planned cuts, the government has indicated that spending on health and housing will be maintained as priority areas.
The full set of measures is expected to be announced after the proposal is reviewed and finalised.
