Parliament sends MVR 5b supplementary budget to committee

A supplementary budget proposed to include an additional MVR 5 billion in this year's budget has been referred to the parliamentary budget committee for consideration.

The government proposed a supplementary budget of MVR 5 billion, bringing the total budget for this year to MVR 55 billion.

This proposal was presented to the parliament during Thursday's morning sitting, with the debate commencing at 1 p.m. and continuing until the conclusion of the sitting. Speaker Abdul Raheem Abdulla announced at the end of the sitting that the supplementary budget had been referred to the budget committee for further review.

The debate on the supplementary budget was brief, with the Majority Leader of Parliament and Inguraidhoo MP, Ibrahim Falaah, requesting that each member wishing to contribute be given five minutes to speak. Despite the short debate, the budget was promptly handed over to the budget committee, a body that includes both the finance committee and the economic committee.

The budget committee has been allotted a single day to complete its review and study of the proposed supplementary budget.

Finance minister Moosa Zameer, who presented the budget, clarified that the 2024 budget was formulated by the previous administration. He emphasised that the budget does not entirely align with the vision and priorities of President Mohamed Muizzu's government.

The finance minister highlighted that when the budget was approved last year, it was anticipated that expenditures for this year would total approximately MVR 60 billion.

The supplementary budget of MVR 5 billion is set to be funded through a combination of project loans, domestic loans, and the issuance of treasury bills (T-bills). Zameer outlined the financing strategy, specifying that MVR 1 billion would be sourced from foreign loans, while MVR 3 billion would be financed domestically. The supplementary budget allocations include:

Zameer stressed that the MVR 2 billion allocated for PSIP projects is necessary to ensure the continuation of ongoing development initiatives.

With the additional MVR 5 billion included in the budget, the expected revenue and grants for this year are projected to reach MVR 34 billion. However, the supplementary budget is expected to add an overall deficit of MVR 4 billion, bringing the total budget deficit for this year to MVR 18 billion. This represents 16% of the nation's projected productivity.

The finance minister also highlighted a concerning aspect: by the end of the year, the national debt is expected to reach 118% of GDP.