- The Maldives shifted from a MVR 910.9 million surplus in 2025 to a MVR 1.13 billion deficit, as expenditure grew 19.3 percent while revenue rose only 10.4 percent.
- Revenue reached MVR 27.61 billion, driven by tax collections of MVR 21.48 billion, with GST the largest source at MVR 10.92 billion.
- Recurrent expenditure surged 20.8 percent to nearly MVR 25 billion, with subsidies jumping 76.3 percent, meaning most spending went to services rather than development.
Government spending grew nearly twice as fast as revenue during the first seven and a half months of 2026, moving the Maldives from a fiscal surplus a year earlier to a deficit of MVR 1.13 billion.
Figures published by the Ministry of Finance and Public Enterprises show that the state received MVR 27.61 billion in revenue and grants between 1 January and 20 August. Over the same period, it recorded MVR 28.74 billion in recurrent and capital expenditure.
In simple terms, the government spent approximately MVR 104 for every MVR 100 it received during the period.
The position marks a significant reversal from the same point in 2025, when revenue and grants stood at MVR 25 billion and expenditure was MVR 24.09 billion, producing a surplus of MVR 910.9 million.
The movement from last year’s surplus to this year’s deficit represents a MVR 2.04 billion change in the fiscal position.
Revenue continued to grow, rising by MVR 2.61 billion, or 10.4 percent, compared with the same period last year. However, expenditure increased by MVR 4.65 billion, or 19.3 percent.
Tax collections accounted for nearly 78 percent of all government income, reaching MVR 21.48 billion. This was 12.1 percent higher than the MVR 19.16 billion collected by 20 August last year.
Goods and Services Tax remained the largest source of income, generating MVR 10.92 billion. Of this amount, MVR 7.39 billion came from Tourism Goods and Services Tax, while general GST contributed MVR 3.53 billion.
Business and property tax revenue increased by 20.5 percent to MVR 5.55 billion, while import duty collections rose from MVR 1.87 billion to MVR 2.19 billion.
Non-tax revenue showed much weaker growth, increasing by just 0.9 percent to MVR 5.67 billion. Fees and charges fell by 11 percent to MVR 2.3 billion, partly offsetting increases in income from government property, resort rent and land-related payments.
The main pressure came from recurrent expenditure, which covers the routine cost of operating the government, including salaries, pensions, subsidies, grants and administrative expenses.
Recurrent expenditure climbed by 20.8 percent to nearly MVR 25 billion and represented 87 percent of total expenditure. Capital expenditure, which includes buildings, equipment and infrastructure, accounted for the remaining 13 percent at MVR 3.75 billion.
Spending on salaries, wages and pensions increased by 11.1 percent to MVR 9.39 billion. Administrative and operational expenditure rose more sharply, increasing by 27 percent to MVR 15.54 billion.
Within this category, grants, contributions and subsidies reached MVR 8.47 billion, an increase of 43 percent from the previous year. Direct spending on subsidies rose by 76.3 percent, from MVR 2.01 billion to MVR 3.54 billion.
This means much of the increase in government spending went towards maintaining services, providing financial support and meeting recurring obligations rather than expanding development investment.
Public Sector Investment Programme expenditure moved in the opposite direction. Spending under the programme declined by 29.1 percent, from MVR 5.32 billion last year to MVR 3.77 billion this year.
Transport infrastructure remained the largest area of development spending at MVR 1.33 billion, but this was substantially lower than the MVR 3.66 billion recorded by the same date in 2025. Spending increased in several other areas, including land management, public housing, water and sanitation, and education, but these increases were not large enough to offset the fall in transport infrastructure expenditure.
Before financing and interest costs are counted, the government recorded a primary surplus of MVR 2.21 billion. This means its revenue remained sufficient to cover other recurrent and capital expenses. However, the primary surplus was 44.4 percent lower than the MVR 3.97 billion recorded a year earlier.
Financing and interest costs reached MVR 3.34 billion, turning the primary surplus into the overall deficit of MVR 1.13 billion.
The headline expenditure figure does not include repayment of the original amount borrowed through government loans. Loan repayments reached MVR 9.72 billion during the period, more than double the MVR 3.94 billion repaid by the same date last year.
Although repayment of borrowed principal is not treated as expenditure when calculating the fiscal deficit, it still places pressure on government cash flow and creates a need to secure funds through revenue, refinancing or new borrowing.
The report separately placed outstanding government securities at MVR 99.01 billion as of 10 August. Government securities include instruments such as Treasury bills and bonds used by the state to borrow money. The figure does not represent the Maldives’ entire public debt, but it shows the scale of borrowing raised through these instruments.
The full-year budget anticipates revenue and grants of MVR 40.37 billion and expenditure of MVR 49.21 billion, leaving a projected deficit of MVR 8.84 billion. By 20 August, the government had received 68.4 percent of its annual revenue projection and recorded 58.4 percent of planned recurrent and capital expenditure.
However, spending and revenue are not distributed evenly throughout the year, meaning the figures cannot be used alone to predict the final deficit for 2026.
The ministry also cautioned that expenditure figures represent transactions recorded in government accounts and do not necessarily mean that every payment has already been settled in cash. Revenue and expenditure figures may change as reconciliation work continues.
