The Ministry of Finance’s latest Weekly Fiscal Developments report, covering data up to 4 September 2025, shows the Maldives running a cumulative surplus of MVR 868.7 million. While at first glance this suggests a healthy budget position, the underlying figures tell a more nuanced story.
Total revenues and grants reached MVR 26.31 billion, compared with expenditure of MVR 25.44 billion. The bulk of the revenue came from taxes, totalling MVR 20.51 billion. Tourism Goods and Services Tax led the way at MVR 7.46 billion, supported by General GST at MVR 3.52 billion. Green Tax collections nearly doubled year-on-year to MVR 1.47 billion, while airport service charges and departure taxes rose to MVR 1.21 billion. These numbers show how much the state’s fiscal health is tied to tourism and aviation flows.
In contrast, import duties fell to MVR 1.99 billion from MVR 2.21 billion last year, reflecting weaker trade inflows. Business and property taxes also declined to MVR 4.65 billion, largely because withholding tax and other business levies dropped compared to 2024’s higher base. Non-tax revenues, at MVR 5.59 billion, were lifted by higher fees and charges as well as the airport development fee, though dividends from state-owned enterprises fell. Grants remained modest at just MVR 203.1 million.
On the spending side, recurrent expenditure dominated at MVR 22.17 billion. Salaries, wages, and pensions reached MVR 9.58 billion, while administrative and operational expenses accounted for MVR 12.57 billion. Subsidies eased to MVR 2.19 billion, down from last year, and health financing through Aasandha climbed to MVR 1.35 billion. Interest costs stood at MVR 2.89 billion, yet the government still posted a primary surplus of MVR 3.75 billion.
The real adjustment has come in capital spending. Capital expenditure has fallen sharply to MVR 3.28 billion, compared with MVR 7.80 billion by the same period in 2024. Within the Public Sector Investment Programme, transport remains the focus with MVR 2.60 billion spent, mainly on airports. Housing, reclamation, and water and sewerage projects, however, are moving at a much slower pace. This slowdown helps explain the surplus but raises questions about whether infrastructure plans are being delayed or underfunded.
Debt servicing and financing trends also stand out. Loan repayments have nearly doubled year-on-year to MVR 3.95 billion, while transfers to the Sovereign Development Fund reached MVR 1.39 billion, suggesting the government is trying to strengthen buffers. Government securities outstanding totalled MVR 95.45 billion at the end of August, with a large share concentrated in one-year treasury bills at MVR 34.16 billion. While the state has also locked in long-term financing through 15–20 year bonds worth MVR 21.45 billion, the short-term rollover risks remain significant.
Looking at budget utilisation across agencies further highlights the capital slowdown. The Ministry of Construction, Housing and Infrastructure has spent MVR 2.12 billion out of an allocated MVR 8.02 billion, while the Ministry of Tourism and Environment has used just MVR 265.9 million of MVR 1.68 billion. By contrast, agencies with payroll-heavy budgets, like Education and Health, are closer to their spending paths.
The reported surplus is not final, since these are posted transactions that may later be revised through reconciliation. Still, the fiscal picture is clear: revenue strength is anchored in tourism, recurrent spending is steady, and capital execution is lagging. The coming months will show whether project spending accelerates or if the government continues to prioritise short-term fiscal balance and debt service over infrastructure delivery.
