Maldives Records MVR 12.26 Billion Deficit

The Maldives Ministry of Finance has released its latest Weekly Fiscal Developments report, revealing a continuing fiscal deficit as of 12 December 2024. The report highlights a significant gap between cumulative government revenues and expenditures, with broader implications for the nation’s economic stability.

Revenue and Expenditure Insights

Cumulative government revenue and grants stood at MVR 32.37 billion, falling short of the cumulative expenditure of MVR 44.63 billion. This disparity has resulted in an overall fiscal deficit of MVR 12.26 billion for the period. The primary contributors to government revenue were tax collections, making up 76% of total revenue, with non-tax revenues and grants accounting for 22% and 2%, respectively. Import duties showed the most notable increment in tax revenues for the week.

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On the expenditure front, recurrent costs accounted for a substantial 70%, while capital expenditure comprised 30%. The largest expense categories included financing and interest costs, salaries and pensions, and investments in infrastructure and development projects.

Public Sector Investment and Budget Utilisation

The Public Sector Investment Program (PSIP) recorded a total expenditure of MVR 9.6 billion, reflecting continued investment in critical areas such as transport infrastructure, environmental protection, and health services. Key projects included investments in renewable energy, coastal protection, and harbour developments, all aimed at bolstering resilience against climate change and enhancing national connectivity.

Budget utilisation figures indicate significant spending by key government agencies, including the Ministry of Construction and Infrastructure, which accounted for MVR 5.71 billion, followed by the Ministry of Education and the National Social Protection Agency.

Fiscal Outlook

The report underscores the government’s need to manage its fiscal policies amid rising expenditures and moderate revenue growth. While the approved budget for 2024 was MVR 54.97 billion, actual expenditures have already reached MVR 44.63 billion, reflecting increased demand for public spending in areas such as infrastructure development and social welfare.

Efforts to mitigate the deficit include bolstering domestic revenue mobilisation and implementing measures to optimise expenditure. The report notes that ongoing reconciliation work could lead to adjustments in the figures.

With the 2025 fiscal year on the horizon, the Maldives faces mounting pressure to address its fiscal challenges. Strategies for reducing the deficit will likely focus on enhancing revenue streams, refining subsidy allocations, and fostering economic growth through targeted investments.

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