Finance Minister Dr Mohamed Shafeeq has stated that an amount exceeding USD 200 million is required in foreign aid to support the national budget for the remainder of the year, with the anticipation of receiving the first instalment next month.
Of the MVR 6.5 billion supplementary budget sanctioned by parliament for the current fiscal year, MVR 4.2 billion (USD 271.9 million) was earmarked to be sourced from international channels. Speaking to the Parliamentary Budget Committee last week, Minister Shafeeq expressed confidence in obtaining support from various foreign entities, particularly those in the Middle East.
Shafeeq highlighted the necessity of external funding to meet financial obligations for the current year. He stated that if the anticipated foreign funds are not received, there will be a need to reduce expenditures, involving a temporary suspension of pending projects in adherence to the policy of commencing projects only with approved funding.
While emphasising the importance of every project, Shafeeq pointed out that the current national circumstances demand a reduction in expenditure. He ruled out the possibility of printing more money or increasing domestic market fundraising beyond the existing plan, citing limitations and commitments by the President to refrain from further monetary printing.
Shafeeq hinted at the prospect of expediting cost-cutting measures in the upcoming year if expected foreign funding falls short. These measures may include reductions in electricity subsidies and Aasandha expenditure, with subsidy disbursements targeted directly at those in genuine need.
“We won’t wait until the year-end. If the expected funds do not materialise by June or July, we will expedite the implementation of expenditure cuts. The objective is to address immediate challenges and secure long-term stability,” Shafeeq concluded.