The Maldives’ Ministry of Finance reports a significant reduction in government expenditure by MVR 585 million in January 2024. This marks a change from the same period last year when expenditures exceeded revenue by MVR 757.1 million.
For January, the government recorded revenue and grants totalling MVR 3.6 billion, with expenditures reaching MVR 3.3 billion. This resulted in a budget surplus of MVR 585 million for the month. Notably, the government successfully covered its recurrent expenditures (MVR 2.5 billion) with January revenue (MVR 3.6 billion).
The most significant reductions in expenditure were observed in infrastructure development projects (PSIP), administrative and operating expenses, and capital expenditures. Spending on PSIP projects decreased from MVR 1.7 billion in January 2023 to MVR 287.5 million. Similarly, administrative and operating expenses reduced from MVR 2.1 billion to MVR 1.4 billion, and capital expenditures decreased from MVR 1.9 billion to MVR 446 million.
While reductions occurred in most areas, salary and allowance expenses rose from MVR 900 million in January 2023 to MVR 1 billion. Additionally, the government allocated MVR 571 million for loan repayment and interest, MVR 287.5 million towards PSIP projects, and deposited MVR 87 million into the Sovereign Development Fund.
The substantial reduction in expenditure is particularly noteworthy given that the previous year was an election year. Historically, election years in the Maldives have often seen increased government spending on various projects and initiatives. This contrast suggests a conscious effort by the current administration to adopt a more fiscally conservative approach.