Sun has learned that the government is set to propose a projected budget of MVR 64 billion for next year, marking the highest to date.
The proposed amount represents an increase of MVR 7.4 billion compared to this year’s budget allocation of MVR 56.6 billion.
No further details regarding the proposed budget have been confirmed at this time; therefore, the specific allocations remain unclear, with the Finance Ministry scheduled to present the budget during the parliamentary sitting scheduled for 14:00pm on Thursday.
However, the proposal of such a large budget is likely attributed to the Maldives’ obligation to repay a record amount of debt. In this regard, loan repayments amounting to USD 1.1 billion are due next year alone.
President Dr. Mohamed Muizzu has recently said that next year’s budget will be focused on strengthening the country’s healthcare system.
While next year’s budget is being promoted as a health budget, this year’s budget had previously been touted by government officials as a “housing budget.”
However, the actual numbers paint a different picture.
2025 budget book. (Photo/People's Majlis)
The latest fiscal report released by the Finance Ministry shows that only nine percent of the MVR 1.8 billion allocated for housing has been spent.
Housing is among many plans in this year’s budget that had gone unimplemented. In this regard, while MVR 7.7 billion was allocated in the budget for fiscal reforms, they had gone unimplemented.
The ruling People’s National Congress (PNC) had used its Parliament supermajority to pass a record-high MVR 56.6 billion budget for this year. But with just two months left until the end of the year, the total expenditure stands at MVR 30.5 billion, which is MVR 186 million lower than total revenue, which stands MVR 30.7 billion.
The government has been careful not spend beyond its revenue.
This comes as the country grapples with staggering debt, both internal and external.
The government has been accused by the opposition of owing billions of Maldivian Rufiyaa to private contractors. However, the actual figure remains unclear as the Finance Ministry has repeatedly declined to disclose this figure. But earlier this month, President Muizzu said the government will soon finish paying off MVR 2.3 billion in outstanding payments to contractors.
The opposition alleges that the government plans to get this done by having the central bank invest MVR 2.5 billion in the pension fund and then having the Pension Administration Office invest the money in a government bond – something that they warn is the same as money printing.
While the government has denied claims of money printing, President Muizzu has reiterated that the unpaid dues to private contractors will be settled without resorting to printing money.
During his 2023 presidential campaign, President Muizzu vowed he would never print money, as his predecessor had resorted to during the Covid-19 pandemic. He repeatedly reiterated this pledge after taking office, naming avoiding money printing as one of his administration’s crowning achievements.
The MVR 30.5 billion spent so far this year includes MVR 26.5 billion in recurrent expenses – making for a staggering 87 percent of total costs. The spending on capital expenditure stands at MVR 4 billion – a mere 13 percent of total costs. This accounts for just 32 percent of MVR 12.5 billion allocated in the budget to implement projects.
The financial difficulties which the government is grappling with is evident from the statistics.
With two months left in the year, the government collected MVR 30.7 billion in revenue out of the MVR 39.8 billion which was projected.
Notably, the biggest international credit ranking agencies, Moody’s and Fitch, has lowered Maldives’ credit ranking over its high debt burdens.