Ministry of Finance, on Sunday, decided to reassess and amend the state budget declared for the year 2020, due to the significant reduction in revenue generated by the state, in the wake of the ongoing COVID-19 pandemic.
According to the ministry, the revised budget will be submitted to the Parliament, as soon as sittings begin. The 19th Parliament will conclude the recess period and commence its third session on the first week of November.
In June, President Ibrahim Mohamed Solih had tasked the "Working Group of Finance", established under the national taskforce assembled for the COVID-19 response, to conduct the necessary research and review state resources.
Despite confirming its intent to tweak the government's budget, the finance ministry did not disclose further details pertaining to the specific alternations that are being considered.
Nevertheless, local media Mihaaru has reported that certain projects listed in the 2020 budget are to be postponed while overall alterations shall be made to reduce government expenditure.
In 2019, Maldives' Parliament approved MVR 37.8 billion as the 2020's state budget, with the assumption of generating MVR 30 billion as revenue.
However, by the end of August, the state had only received MVR 8.8 billion, which marks a 46 percent decrease, compared to the revenue generated during the same period of the previous year.
As with numerous countries around the world, amid the ongoing COVID-19 pandemic, Maldives closed its air and sea borders to tourist arrivals on March 27, halting the issuance of on-arrival visas. The closure of borders remained in place until June 15.
Heavily reliant on tourism for revenue, the restrictions on international travel left the country vulnerable to severe economic impacts.
Overall, the Maldivian government estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency and a state deficit of MVR 13 billion in 2020 as a result of the pandemic's impact on the tourism industry, and subsequently the economy.
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