- The Maldivian fiscal deficit narrowed to MVR 4.5 billion for the first nine and a half months of 2026, a MVR 4.34 billion improvement from the prior year, driven largely by cuts to capital development spending.
- Total revenue and grants rose 2.6 per cent to MVR 31.89 billion, with tax receipts contributing MVR 24.63 billion, while non-tax earnings fell 22.6 per cent to MVR 6.74 billion.
- Total expenditure climbed 16.9 per cent to MVR 36.39 billion, with recurrent spending reaching MVR 31.35 billion amid rising wages, pensions, subsidies, and administrative costs.
The Maldivian government nearly halved its budget deficit during the first nine and a half months of 2026, lowering the fiscal shortfall to MVR 4.5 billion as sharp cuts to public development projects helped offset rising operational costs.
Data published by the Ministry of Finance & Public Enterprises reveals that the state collected MVR 31.89 billion in cumulative revenue and grants between 1 January and 15 October. Over the same period, total recurrent and capital outlays reached MVR 36.39 billion.
In simple terms, the state spent roughly MVR 114 for every MVR 100 it brought in during this timeframe.
This performance marks a substantial recovery from the corresponding period in 2025, when the fiscal deficit stood at MVR 8.84 billion. The shift represents a MVR 4.34 billion improvement in the budget position year-on-year.
Total revenue and grants grew by MVR 813.1 million, or 2.6 per cent, compared to the same period last year. Over the same timeframe, cumulative expenditure expanded by MVR 5.26 billion, or 16.9 per cent, rising from MVR 31.13 billion in 2025 to MVR 36.39 billion in 2026.
Tax receipts formed the core of state income, generating MVR 24.63 billion and accounting for 77.2 per cent of all revenue. This reflects a 7.0 per cent increase over the MVR 23.03 billion collected by mid-October last year.
The Goods and Services Tax remained the primary revenue driver, bringing in MVR 12.36 billion. Within this total, Tourism GST contributed MVR 8.12 billion, while General GST supplied MVR 4.43 billion, registering the single largest revenue gain of the week.
Business and property taxes delivered MVR 5.90 billion, while import duties grew from MVR 2.42 billion to MVR 2.79 billion. Airport service charges and departure taxes brought in MVR 1.55 billion, Green Tax yields reached MVR 1.62 billion, and royalties supplied MVR 259.2 million.
Non-tax earnings weakened, dropping by 22.6 per cent from MVR 8.70 billion in 2025 down to MVR 6.74 billion. Fees and charges fell to MVR 2.83 billion, though Airport Development Fees added MVR 2.30 billion. Property income generated MVR 1.75 billion—including MVR 1.49 billion from resort leases—while dividends from State-Owned Enterprises supplied MVR 552.3 million. Foreign grant inflows increased from MVR 310.7 million to MVR 522.4 million.
Routine operational costs remained the primary source of spending pressure, covering public salaries, pensions, subsidies, grants, and general administration.
Recurrent expenditure reached MVR 31.35 billion, absorbing 86.2 per cent of all state spending. Wage, salary, and pension outlays climbed to MVR 12.05 billion, while administrative and operational costs rose to MVR 19.23 billion.
Within operational spending, grants, contributions, and subsidies totalled MVR 10.45 billion. Direct subsidy outlays absorbed MVR 2.48 billion, Aasandha health insurance payments took MVR 2.02 billion, and council grant distributions accounted for MVR 1.80 billion. Debt financing and interest obligations reached MVR 3.84 billion.
Consequently, the bulk of state spending went towards preserving public services, funding welfare programs, and settling routine operational debts rather than broadening infrastructure development.
Expenditure on the Public Sector Investment Programme moved in the opposite direction. Spending under the capital programme plunged by 40.2 per cent, falling from MVR 8.31 billion last year to MVR 4.97 billion in 2026.
Transport infrastructure remained the largest single category of development spending under economic affairs at MVR 1.98 billion, though this fell sharply from the MVR 4.10 billion spent by the same date in 2025. Land management absorbed MVR 651.6 million, public housing and utilities received MVR 673.2 million, educational infrastructure took MVR 459.8 million, and healthcare infrastructure received MVR 313.4 million.
Before accounting for financing and interest costs, the state recorded a primary deficit of MVR 650.8 million. This marks a shift from the MVR 4.06 billion primary surplus logged a year earlier.
Financing and interest expenses of MVR 3.84 billion widened this primary deficit into the final overall budget deficit of MVR 4.50 billion.
The main expenditure figures exclude repayments on principal debt from government loans. Principal loan repayments reached MVR 10.10 billion during the period, more than double the MVR 4.57 billion repaid by mid-October last year.
While principal repayments are not calculated as expenditure when determining the fiscal deficit, these debt service payments continue to constrain state liquidity, requiring ongoing revenue generation, debt refinancing, or new borrowing.
The report separately listed outstanding government securities at MVR 100.43 billion as of 5 October. These securities comprise instruments such as Treasury bills, Treasury bonds, and Islamic debt instruments used by the government to raise capital. Domestic debt instruments made up MVR 98.89 billion of the total, alongside MVR 1.54 billion in external Sukuk bonds.
The approved full-year budget projects revenue and grants of MVR 40.37 billion against expenditure of MVR 49.21 billion, targeting an annual deficit of MVR 8.84 billion. By 15 October, the state had realized 79.0 per cent of its full-year revenue projection and incurred 73.9 per cent of its planned expenditure.
However, since revenue inflows and spending disbursements fluctuate throughout the year, these figures alone cannot predict the final fiscal outcome for 2026.
