Auditor General's Office has warned budget financing will need an additional MVR 19 billion if the projected expense cuts for 2024 do not follow according to plan.
The Auditor General's Office advisory to the budget committee notified that if the subsidy reform and expense cuts are not implemented accordingly, the budget may require an additional MVR 1.8 billion financing on top of the projected MVR 17.2 billion total for next year.
Audit Office Director Mohamed Shaan noted that the projected amount in budget support loan for 2024 will not be easy to secure from international markets; given its extensive nature. He said it was crucial to identify how this would impact the foreign reserve of the Maldives and plan a course of action in such a scenario.
"According to legal suspension regarding budget support loans, securing such financing is against the spirit of law. The budget paper further highlights that securing USD 450 million in budget support loans for the next fiscal year would be challenging, and we need to factor how this would impact the foreign reserve and make an action plan based on this," Shaan said.
The office shared concern about the inflation of government expenditure on Aasandha and pensions year-on-year.
"We forecast the state expenditure on double pension will increase significantly in future. The budget forecasts that a transition of the subsidy into a direct subsidy transfer system would save MVR 1.1 billion in expenses," Shaan added.
The office further made recommendations to submit realistic objectives to increase the state's revenue besides expense cuts, and noted that the objectives should be planned ahead and actionable.
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