Funding for 1,273 Ongoing Projects Secured, Rising Oil Costs Absorbed via Subsidies
- The Maldivian government absorbed rising global oil prices through its subsidy framework, with total subsidy spending reaching USD 279 million for the year, USD 91 million above the initial USD 188 million allocation.
- Finance Minister Hassan Zareer stated the administration aims to keep the budget deficit in single digits as a percentage of GDP without tabling a supplementary budget.
- The Finance Ministry has secured funding arrangements for 1,273 active infrastructure projects to guarantee timely contractor payments, with key basic island services targeted for completion by Independence Day 2028.
The Maldivian government has absorbed the financial shock of escalating global oil prices through its subsidy framework, while simultaneously securing payment structures for 1,273 nationwide infrastructure projects, according to Minister of Finance and Public Enterprises Hassan Zareer.
Speaking at the 10th episode of the Ahaa Forum — a public platform jointly organised by the President’s Office and Public Service Media — Minister Zareer outlined the state’s fiscal measures aimed at shielding the public from international economic headwinds triggered by ongoing conflicts in the Middle East.
The Minister detailed that geopolitical tensions in the Middle East have driven up global crude oil prices, logistics fees, and international travel costs since March. To prevent these price shocks from trickling down directly to consumers, the government expanded its state subsidy mechanism. Against an initial annual allocation of USD 188 million for subsidies, expenditure has surged by an additional USD 91 million. Total spending on state subsidies has now reached USD 279 million for the year, with fuel subsidies consuming the largest share and widening the overall budget deficit.
Despite the growing fiscal burden, Minister Zareer highlighted that the administration aims to maintain the overall budget deficit in single digits as a percentage of Gross Domestic Product (GDP). He also emphasised that the government intends to achieve this target without tabling a supplementary budget, contrasting with the fiscal adjustments required in previous fiscal years. International credit rating agencies and financial institutions have acknowledged these fiscal stabilization measures.
Responding to a query regarding stalled local initiatives, Minister Zareer affirmed that the government actively monitors development schedules across the archipelago to resolve execution bottlenecks.
The global conflict has disrupted shipping lines and caused material supply shortages for key construction items. However, the Minister explained that the Finance Ministry has established funding arrangements for 1,273 active infrastructure projects to guarantee timely contractor payments based on assigned priority levels.
The key basic island services are targeted to be completed by Independence Day in 2028.
