Next year's budget estimated to reach MVR 50 billion

The ministry of finance estimates that the budget for the next year could reach up to MVR 50 billion.

In the Fiscal Strategy Report submitted to parliament, the ministry forecasted that government expenditure for the next year would amount to MVR 48 billion. Out of this, MVR 33 billion is allocated for recurrent expenditure.

For this year, the ministry had allocated a budget of MVR 42 billion. The budget allocation is increasing significantly each consecutive year, attributed to the rise in state revenue as well as state expenditure.

Although budget estimates are given in the Fiscal Strategy Report, the actual numbers will be revealed only when the ministry of finance submits the budget to parliament before the end of this month. The ministry is currently working with the incoming administration on compiling the 2024 budget.

Next year, MVR 15 billion has been allocated for projects, out of which MVR 11 billion is designated for PSIP projects. Additionally, MVR 1.3 billion will be spent on new projects under the New Policy Initiative.

The finance ministry estimates that next year's budget deficit will be at MVR 9.8 billion. This is 8.5 percent of the Maldives' GDP.

MVR 13.4 billion to be sought

According to the Fiscal Strategy Report, next year also presents a need to seek a large segment of funding in addition to revenue to complete the expenses included in the budget. In this view, if a budget of MVR 50 billion is proposed, MVR 13.4 billion will need to be sought.

Instead of seeking bonds from foreign markets, the ministry aims to seek loans as budget support from international bodies and friendly nations. It is proposed that USD 50 million will be sought as budget support in this manner.

In addition to this, it has been decided to sell T-bills worth MVR 6.1 billion in Maldives' market. Next year, MVR 2.5 billion will be allocated for debt repayment. In 2025, this amount will rise to MVR 6.5 billion. In 2026, which marks the year with the largest debt repayment, the amount will reach MVR 11.5 billion.

The finance ministry predicts that next year's state debt will remain approximately the same as the current year, which is estimated at MVR 111 billion.