President Muizzu Defends Spending Cuts, Cites Reduced Loan Reliance

The Maldivian government has revealed a decrease in capital expenditure in 2024 compared to the previous year. According to the Ministry of Finance’s weekly statistics, total expenditure up to March 21st totalled MVR 8.94 billion, representing an MVR 1.45 billion drop from the same period in 2023.

This decrease primarily stems from a significant reduction in capital expenditure. In 2023, capital expenditure for the review period stood at MVR 3.64 billion, whereas this year it measures MVR 2.06 billion. This includes expenditures on Public Sector Investment Programme (PSIP) projects, which also show a marked decline from MVR 2.88 billion last year to MVR 1.13 billion this year.

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Despite the drop in capital expenditure, recurrent expenditure has seen an increase. The total recurrent expenditure for 2024 is MVR 6.88 billion, higher than the MVR 6.75 billion recorded in the previous year.

Government revenue in 2024 surpasses that of the previous year. Official statistics report MVR 7.88 billion, fueled by an additional MVR 500 million in tax revenue compared to 2023. The People’s Majlis approved an MVR 49.86 billion budget for the current year.

President Dr Mohamed Muizzu has defended the shifts in expenditure, emphasizing that the government continues to execute projects without utilizing additional printed money. He ascribes the decrease in capital expenditure to a reduced reliance on loans.

Additionally, the President has stressed that over 500 projects, including those initiated by previous governments, are currently underway. He noted that when the government took office, the Sovereign Development Fund (SDF), established to repay foreign loans, had a balance of only USD 2 million. The government has subsequently deposited USD 35 million into the SDF without taking additional loans, printing money, or halting any projects.

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