State budget record surplus in first seven months of the year

The Maldivian government has recorded a budget surplus at the end of the first seven months of 2025, according to the latest fiscal data released by the Ministry of Finance.

As of the last week of July, the state budget maintained a surplus of MVR 314.3 million, in sharp contrast to previous years. For comparison, the government reported a budget deficit of MVR 6.4 billion during the same period in 2024, and a deficit of MVR 4.2 billion in 2023.

This shift comes amid significant spending cuts implemented by the government. Total expenditure as of last week stood at MVR 21.9 billion, marking a 17.4 percent decrease compared to the same period last year.

Decline in Expenditure Across Key Areas:

- Recurrent expenditure dropped by 2.2 percent, while capital expenditure fell sharply by 60.8 percent.

- A large share of recurrent spending—56.2 percent—went towards administrative expenses, which were 7.3 percent lower than in 2024.

- Spending on office supplies and repairs and maintenance both declined by around 20 percent.

- Transport-related costs were reduced by 5.1 percent, and government aid and subsidies dropped by 10.7 percent year-on-year.

Capital expenditure totaled MVR 2.7 billion, with the majority of savings coming from this area. Of the MVR 12.4 billion allocated for the Public Sector Investment Program (PSIP) in the 2025 budget, MVR 3.4 billion has been utilized so far.

Unlike previous years—where the bulk of PSIP spending focused on land reclamation and road development—2025 has seen a shift towards flood mitigation and housing projects:

- MVR 2.2 billion has been allocated to flood prevention and drainage infrastructure.

- MVR 114.6 million was spent on housing projects in the first seven months of the year.