According to the Ministry of Finance, the Maldives government has spent MVR 1.5 billion on subsidies in just one and a half months.
Statistics from the ministry reveal that, as of February 16, the government spent MVR 390 million on the Aasandha, the state's universal healthcare scheme, which is 30 percent of the sum allocated for this from the budget.
By the same date, the state had spent another MVR 720 million on other subsidies, including those for essential needs such as fuel, water, sewerage, transportation, waste management, and fisheries-related subsidies. The government has also allocated an annual total of MVR 588 million to fuel subsidies.
The government allocated a total of MVR 6.6 billion for subsidies for the entire fiscal year of 2023, of which 20 percent has already been expended. At the current rate of expenditure, forecasts indicate that the government may exhaust the budgeted amount for subsidies within six months.
The rate at which expenditure increases compared to earnings is a continued issue for the government since most fiscal years conclude with significant budget deficits. One of the primary reasons for the excess expenditure is that a significant amount is spent on subsidies, which continue to rise year after year. The International Monetary Fund (IMF) has recently advised the government to reduce its annual subsidy spending as well.
Although the government has planned austerity measures and revisions to state finance policies, they have not been implemented yet.
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