The government has submitted the proposed State Budget for 2027 to parliament today, quoting a total of MVR 59.7 billion. 

This is MVR 4.5 billion lower than the MVR 64.2 billion budget passed for the running year. 

At today's parliament sitting, Finance Minister Hassan Zareer submitted the proposed State Budget for 2027, totalling MVR 59.7 billion, equivalent to 46.1 percent of the country's GDP. 

Excluding the year of the Covid-19 pandemic, the State Budget has been increasing year on year over the past decade. 

Although the proposed budget's total is lower than the current year, budget deficit is higher by MVR 1.9 billion. Over deficit is estimated at MVR 9.4 billion in the proposed budget. For this year, the amount quoted as deficit was MVR 7.5 billion. 

MVR 56.2 billion from next year's budget has been set for expenditure, of which MVR 42.7 billion goes towards recurrent expenses. This amounts to approximately 71.5 percent of the total budget. The second higher amount has been allocated for capital expenses, at MVR 9.8 billion. 

State debt is at MVR 161.3 billion (124.5 percent of GDP), and the budget estimates that MVR 4.9 billion will go towards debt repayment next year. 

In the proposed State Budget for 2027, revenue and free aid is estimated at MVR 43.2 billion. This number is MVR 1.4 billion higher than this year's revenue. Of this, approximately 77 percent is attributed to tax income, projected at MVR 33.6 billion. Minister Zareer announced that although an increase in tax income is projected for next year, the government will not increase any existing taxes. 

Presenting the proposed budget, Minister Zareer stated that it is a responsibility of the government to maintain the country's financial stability even as development projects are carried out. He stated that the proposed budget's targets prioritize maintaining financial sustainability of the State. 

"As such, one of the objectives of next year's budget is to ensure State revenue is maintained above 32 percent of GDP. Along with this, it aims to cover the State's recurrent expenditure through State revenue," Zareer stated. 

Zareer stated that next year, the State's direct debt is expected to be maintained at 117 percent of GDP. In 2028, this figure is expected to decrease to 116.3 percent, and the government targets to further lower this to 107.9 percent for 2029. 

Minister Zareer also said that in determining a figure for PSIP spending, the government aimed to maintain spending from domestic budget at no higher than 70 percent. The government also worked to maintain interest costs of foreign loans at 12 percent of total State revenue. 

"The main objective of all these efforts is to, by the end of 2028, decrease the State's overall balance deficit to 5 percent of GDP. We also estimate that PSIP expenditure in 2028 can also be lowered to 7 percent of GDP," Zareer said. 

Zareer said that at the end of this year, the State's overall budget deficit is expected to be at MVR 7.6 billion, 6.2 percent of GDP. 

"While budget deficit for 2027 is expected to reach MVR 9.4 billion, this is 7.3 percent of GDP. With these deficit figures, it is expected that primary balance as per GDP will be 2.5 percent in 2026, and 3.4 percent in 2027," he added. 

The 2027 State Budget submitted to parliament today will be reviewed jointly by the Economic Committee and Public Accounts Committee. The Speaker of Parliament directed the committees to begin review. Meanwhile, MPs will debate on the budget after seven days.