Subsidy spending exceeds 2026 budget by MVR 1.3 billion
The 2026 budget allocated MVR 2.9 billion for subsidies. Spending as of 24 September was therefore MVR 1.3 billion above the budgeted amount.
Top Stories
Government spending on subsidies has reached MVR 4.1 billion this year, exceeding the amount allocated in the 2026 budget by MVR 1.3 billion, according to the latest fiscal figures.
The Ministry of Finance and Public Enterprises’ Weekly Fiscal Developments report shows that MVR 4.1 billion had been spent on subsidies as of 24 September. The ministry publishes the report with detailed figures on government revenue and expenditure.
The 2026 budget allocated MVR 2.9 billion for subsidies. Spending as of 24 September was therefore MVR 1.3 billion above the budgeted amount.
Subsidy expenditure has also increased by MVR 1.8 billion compared with the same period last year. The government had spent MVR 2.3 billion on subsidies during the corresponding period in 2025.
A major factor behind the increase has been higher global oil prices linked to geopolitical developments in the Middle East, which have increased the cost of maintaining fuel and electricity subsidies.
The government has continued subsidising fuel to limit the impact of higher international prices on domestic consumers, while electricity subsidies are used to maintain existing tariffs.
The Finance Ministry has also cited elevated global energy prices arising from developments in the Middle East in relation to the government’s energy financing requirements. In August, the government signed a USD 50 million Energy Security Emergency Assistance Project with the Asian Development Bank to respond to higher global energy prices.
The 2026 budget had allocated MVR 1.06 billion for fuel subsidies, while the government has said its medium-term policies include increasing renewable energy use to reduce reliance on fossil fuels and lower expenditure on electricity and fuel subsidies.
Aasandha expenditure has also increased this year.
Government spending on Aasandha stood at MVR 1.7 billion as of 24 September, an increase of MVR 330 million compared with the same period last year.
The 2026 budget allocated MVR 2 billion for Aasandha. This leaves about MVR 300 million of the annual allocation remaining with more than three months of the year still to run.
While Aasandha expenditure has increased, spending on medical assistance provided separately through the National Social Protection Agency (NSPA) has declined.
The government had spent MVR 409 million on medical assistance through NSPA as of 24 September, MVR 24 million less than during the corresponding period last year.
