Finance data exposes budget surplus masked a sharp drop in development spending
As of mid-March 2026, the state budget recorded a surplus of MVR 2.10 billion, driven by increased tax revenues and a significant reduction in government spending. While tax collections rose to MVR 7.73 billion, total expenditure fell to MVR 7.27 billion due to sharp declines in infrastructure development and debt servicing costs. Despite higher spending on salaries and subsidies, capital investment in transport and housing projects saw a notable decrease compared to the previous year.
From the ceremony marking the commencement of unauthorized land reclamation for the development of an airport in N. Vihafaru. | President's Office | President's Office
The latest weekly fiscal report released by the Ministry of Finance and Planning has indicated a further decline in expenditures allocated to development projects.
While the state budget maintained a surplus as of mid-March, this has been attributed to increased tax revenue alongside reduced spending on project implementation.
As of 19 March 2026, total state revenue and grants reached MVR 9.38 billion, while total government expenditure stood at MVR 7.27 billion. This leaves the budget with a surplus of MVR 2.10 billion for the year to date, a significant rise from the MVR 873.7 million surplus recorded during the same period in 2025.
Tax revenue increased from MVR 6.85 billion during the same period last year to MVR 7.73 billion this year. The largest share of this came from the Goods and Services Tax (GST), which generated MVR four billion. Of this, MVR 2.86 billion was collected from Tourism GST (TGST) and MVR 1.14 billion from General GST. Revenue from business and property taxes also rose, reaching MVR 2.21 billion.
In contrast, non-tax revenue declined from MVR 2.07 billion in the same period last year to MVR 1.60 billion this year.
Total expenditure of MVR 7.27 billion marks a decrease from the MVR 8.11 billion spent during the same period in 2025. Of this, MVR 6.61 billion was allocated to recurrent expenditure, while capital expenditure accounted for MVR 665.2 million.
A key shift highlighted in the report is the reduction in spending on development projects and investments. Expenditure under the Public Sector Investment Program (PSIP) fell from MVR 857.7 million in 2025 to MVR 695.4 million. Spending on transport infrastructure saw a steep drop from MVR 530.5 million to MVR 182.0 million, while allocations for environmental protection and housing projects also declined.
Within recurrent expenditure, spending on salaries and allowances increased to MVR 2.73 billion. However, administrative and operational costs decreased from MVR 4.74 billion last year to MVR 3.88 billion. Spending on debt servicing and interest payments also declined, falling from MVR 1.45 billion to MVR 577.7 million.
At the same time, spending rose in certain areas. Expenditure on subsidies and allowances increased to MVR 618.2 million, while MVR 633.7 million was disbursed as block grants to local councils.
At the institutional level, the highest expenditures were recorded by the Special Budget, the Ministry of Education, NSPA, the Maldives Police Service, the Ministry of Health and MNDF. Despite this, budget utilization by many agencies linked to infrastructure development has declined compared to the same period last year.
