Maldives proposes MVR 56.6 billion budget for 2025
It includes a deficit of MVR 9.4 billion, marking the lowest budget deficit in recent years
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Government on Thursday presented a budget totalling MVR 56.6 billion for the upcoming year.
Finance minister Moosa Zameer delivered the budget proposal, outlining major allocations, expected revenues, expenditures, and fiscal reforms for 2025.
Zameer detailed the budget estimates as follows:
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Projected grants and revenue amount to MVR 39.8 billion
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Total expenditures are estimated at MVR 51 billion
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A deficit of MVR 9.4 billion, marking the lowest budget deficit in recent years
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Anticipated economic growth of 6.4% for 2025
For 2024, the approved budget was MVR 49.5 billion. A recent supplementary budget of MVR 5.5 billion was passed, increasing the total budget for 2024 to MVR 55 billion.
The finance ministry highlighted that 2025 will see the largest allocation yet for Public Sector Investment Programme (PSIP) projects, amounting to MVR 12.4 billion. Emphasis in the budget is also placed on expenditure reduction, with targeted savings of MVR 6.6 billion through several cost-cutting strategies.
Key cost-cutting measures outlined include:
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Transitioning to a targeted subsidy system
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Reviewing and reforming the Aasandha national health insurance scheme to align with sustainable practices
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Mitigating fiscal and external risks related to oil price fluctuations
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Revising state pensions to prevent redundancy
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Reforming State-Owned Enterprises (SOEs)
In addition to cost-cutting, revenue enhancement measures are projected to bring in MVR 4.9 billion. The finance ministry stated that policies have prioritised dollar revenue sources.
Outlined revenue-increasing measures include:
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Raising import duties on cigarettes and introducing a bidding process
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Increasing airport tax and associated fees
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Adjusting green tax rates
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Introducing a fee for private sand dredging projects
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Increasing the Tourism Goods and Services Tax (TGST) TGST rate
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Fully implementing the destination principle in the GST system
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Levying a frequency spectrum charge
The finance ministry also noted that a total of MVR 11.5 billion in fiscal reforms are embedded within the budget for 2025. These reforms and measures aim to stabilise and strengthen the nation’s financial standing while pursuing targeted development initiatives across key sectors.
