State spending surges past MVR 34bn mid-year: expenditure jumps 45 percent as public deficit emerges
31 ޖުލައި 2026 | ހުކުރު 12:31The government recorded a MVR 1.3 billion deficit by late June, with MVR 34.2 billion in spending against MVR 22.5 billion in revenue. Major outlays included debt servicing, staff wages, and infrastructure projects. While tax collections reached MVR 17.2 billion, the Ministry of Finance noted that these figures remain subject to revision.
Minister of Finance and Public Enterprises Hassan Zareer. | Finance Ministry
Through the end of June, total government spending reached MVR 34.2 billion, marking a 44.5 percent rise compared to the MVR 19 billion spent during the corresponding six-month timeframe in 2025.
Based on a financial document published by the Ministry of Finance and Public Enterprises detailing government finances through June of this year, recurrent outlays comprised MVR 20.8 billion, while MVR three billion went toward capital expenses. Within recurrent expenditures, staff wages and compensation made up the largest share, followed by administrative and operational overheads.
Financial figures reveal that the government budget experienced a MVR 1.3 billion deficit by the close of June. Out of the MVR 34.2 billion disbursed, MVR 9.2 billion was assigned to debt servicing.
By late June, total state earnings and grant funding accumulated to MVR 22.5 billion, reflecting a 15.3 percent expansion over the equivalent period in 2025. Throughout June alone, government coffers brought in MVR 3.5 billion, with tax proceeds supplying the primary portion.
A breakdown of government receipts indicates that tax collections reached MVR 17.2 billion. This figure incorporates MVR 9.6 billion from GST and MVR 3.5 billion from Business and Property Tax. Additionally, import duties generated MVR 1.7 billion, while the Green Tax brought in MVR 1.2 billion. Non-tax income reached MVR 4.9 billion, derived mainly from diverse fees and leasing revenues.
Under the Public Sector Investment Program (PSIP), project outlays totaled MVR 2.9 billion through June. Substantial funding went toward establishing transit networks, residential housing projects, and building out health and education infrastructure. Looking at individual government bodies, the highest expenditure levels were registered by the Ministry of Education, the Ministry of Health, and security organizations.
Concerning the statement released on July 30, the Ministry of Finance and Public Enterprises noted that the cited totals account for entries logged up to 22 July 2026.
The Ministry appended that because account reconciliation remains ongoing, these figures could experience additional revisions.
