A record budget of MVR 27.9 billion for the year 2018 has been submitted for parliamentary approval on Wednesday.
Presenting the budget to the parliament over continued protests of the opposition lawmakers, Minister of Finance Ahmed Munnawar assured that the new budget is inclusive, with many developmental projects that the citizens would benefit from.
According to Munnawar, the government will spend MVR 24.9 billion, and collect MVR 22.4 billion as revenue in 2018.
He estimated that the government would receive about MVR 16.3 billion in various forms of taxes, MVR 858 million in foreign aid and about MVR 5.2 from other unspecified sources.
The budget deficit of MVR 2.5 billion would be 3.2 percent of the GDP, he added.
Fifty-six percent of the budget (MVR 16.1 billion) would be spent on recurring expenditures such as salaries and pension schemes, while 43 percent of the budget (MVR 11.9 billion) would be spent on capital investments, the minister said.
Munnawar estimated that by the end of this year, economic growth would see an increase of 6.9 percent. However, he also revealed that the inflation rate was at 3.4 percent this year, and said that it would drop to about 3.1 percent in 2018.
The government has spent MVR 4.3 billion on debt repayment this year, which is 61 percent of the GDP, Munnawar said.
“There is an increase in government debt because there is a lot of development projects going on. The national debt has gone up to MVR 15 billion, and we’ve spent about MVR 18 billion on these projects,” Munnawar explained.
The parliament had approved a budget of MVR 26.8 billion for this year; however, the state proposed a supplementary budget of MVR 493 million late in October, which drove up this year’s budget to MVR 27.3 billion.