The Fiscal Strategy Report shared by the Ministry of Finance indicates that an amount of MVR 64 billion is projected as the baseline budget for 2025.
The Fiscal Strategy Report shared by the Ministry of Finance indicates that an amount of MVR 64 billion is projected as the baseline budget for 2025.
This report which was published yesterday offers a mid year update of the economic situation, budget spending in the initial six months, as well as projection for the coming year.
Although the report projects MVR 64 billion as next year's budget, the government still holds the option of changing the amount. The proposed budget for next year will be submitted to parliament tomorrow.
The government has also decided to next year refinance a part of the USD 500 million (MVR 7.7 billion) sukuk which will be due for repayment in 2026.
The Finance Ministry states that with the expenditure reduction measures implemented, and through increasing State revenue, next year's overall deficit will be at MVR 5.4 billion. However, MVR 16 billion is to be sought as budget financing next year. This includes MVR 4.6 billion through sale of a sukuk or bond and MVR 3.2 billion as foreign loans. Next year, MVR 3 billion is also to be taken through SDF.
The report outlines reform measures for expenditure reduction and the impact this will have on the budget, as well as the effects failure to implement those measures will have.
The report indicates that as reform measures, the government's priority is towards reforming SOEs, introducing direct subsidies and reducing operational costs of offices. However, should these measures not be properly implemented, total expenditure for next year will reach MVR 57 billion. While recurrent expenditure is expected to reach MVR 42 billion, capital expenditure could read MVR 23 billion.
The report says that if the planned measures are implemented, the budget amount can be decreased to MVR 55 billion.
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