Maldives’ budget deficit expected to top MVR 9bn in 2027

The Maldives’ overall budget deficit is expected to top MVR 9 billion next year, according to projections by the Finance Ministry.

Finance Minister Hassan Zareer presented a proposed state budget of MVR 59.7 billion for next year to the Parliament on Thursday afternoon.

Total spending is expected to exceed total revenue again this year.

According to Zareer, the government projects total expenditure to reach MVR 52.6 billion, well above the MVR 43.2 billion in projected revenue and grants.

This is expected to result in an overall budget deficit of MVR 9.4 billion, making for a budget deficit-to-GDP ratio of 7.3 percent.

2027 budget highlights:

• Budget: MVR 59.7 billion
• Expenditure: MVR 52.6 billion
• Revenue and grants: MVR 43.2 billion
• Budget deficit: MVR 9.4 billion

This year’s budget is also heavy on recurrent expenditure.

According to Zareer, MVR 42.7 billion is expected to go into covering recurrent expenses – making for a staggering 81 percent of total expenditure.

This includes MVR 17 billion on salaries, allowances, pensions, retirement benefits and gratuities, and another MVR 13.9 billion on grants, contributions and subsidies, and MVR 4.9 billion in financing and interest costs.