Development frozen, gov’t debt surges as financial crisis intensifies
The government had projected to receive MVR 33.5 billion over the past 10 months
President Dr. Mohamed Muizzu pledged to lift the dollar limit
According to the latest financial report publicized by the Ministry of Finance, the Maldives' budget deficit had reached MVR 9.9 billion by October 31.
Although a total of MVR 29.1 billion was received in revenue and grants in the first 10 months of the year, the government did not achieve its expected revenue during this period.
The government had projected to receive MVR 33.5 billion over the past 10 months. While the projected revenue was not met, expenses were not reduced, resulting in the government spending MVR 9.9 billion more than what was received.
The finance ministry's report indicates that the largest contributor to state revenue is tax money. As such, Tourism Goods and Services Tax (TGST) has generated MVR 7.8 billion. On the other hand, non-tax revenue and grants amounted to MVR 6.8 billion. This means that the government had not achieved significant success in generating revenue outside of tourism.
Over the course of the past 10 months, the government spent a staggering total of MVR 39 billion in expenses. The largest portion of this amount was spent on recurrent expenditure. Approximately MVR 27.9 billion was spent on recurrent expenses, including salaries, wages, and pensions. The ministry stated that this is an increase of MVR 1.5 billion in comparison to the same period last year. The increase in recurrent expenses is reportedly due to higher administrative costs.
While recurrent expenses surged, capital expenditure for development projects decreased to MVR 11.1 billion. Spending on infrastructure had significantly decreased compared to the previous year as well.
With several infrastructural development projects halted in the island nation, the ministry's figures show that the Ministry of Education has used a large portion of its budget.
Further, over the past 10 months, MVR 1.3 billion was spent on the health sector.
The finance ministry's report reveals that the National Social Protection Agency (NSPA) spent more than MVR 2.7 billion during this period.
The figures released by the finance ministry show that while revenue is not increasing significantly, government operational costs are rising. Experts have warned that the government may face further budget-related challenges.
Despite repeated advice from international financial institutions to reduce state expenditures, the incumbent administration of President Dr. Mohamed Muizzu has not taken adequate measures to reduce salaries and operational costs, as evident from the finance ministry's report.
