The Maldives has recorded a marked improvement in its public finances, with the country’s budget deficit shrinking by nearly three quarters over the past year, according to the Ministry of Finance and Planning.
Data from the ministry’s Weekly Fiscal Development Report reveals that the nation reduced its overall deficit by USD 622.57 million in 2025, representing a 73.5 percent decline compared to 2024. By the end of December, state revenue exceeded USD 2.57 billion, up 12.9 percent from USD 2.28 billion collected the previous year.
While the government had projected an annual revenue of USD 2.58 billion and budgeted USD 168.61 million in grants for 2025, actual receipts from grants amounted to USD 26.93 million, falling short of expectations. Nevertheless, the shortfall was more than offset by robust growth in domestic tax and non-tax revenues, which collectively outperformed projections, contributing an additional USD 129.7 million representing a 5.5 percent increase year on year.
Tax revenues alone reached USD 1.89 billion, marking a 10.6 percent rise from USD 1.71 billion in 2024. This growth was underpinned by a substantial surge in the Tourism Goods and Services Tax (TGST), which generated USD 713.36 million, a 15.2 percent increase from the previous year. Non-tax revenues also demonstrated strong performance, climbing 24 percent to USD 648.51 million from USD 525.29 million in 2024.
Reflecting these gains, the Maldives’ overall fiscal deficit was curtailed to USD 227.01 million by the close of 2025, down from USD 849.55 million at the end of 2024. The ministry attributed this improvement to prudent fiscal management, highlighting a combination of disciplined expenditure control and revenue enhancing measures.
Significantly, the nation recorded a surplus in its primary balance for the first time in recent memory. The primary balance, which excludes interest payments on public debt and is a key indicator of fiscal health, moved from a deficit of USD 544.68 million in 2024 to a surplus of USD 77.84 million in 2025. Officials said this milestone signals strong fiscal sustainability and reinforces investor confidence in the country’s ability to manage debt, fund public services, and support economic growth.