The Ministry of Finance has forecast a 5.3% increase in the state budget for 2024, setting it at an estimated MVR 50 billion. The budget emphasises baseline expenditure, cost-cutting measures, and new projects and programmes.
This projection coincides with the incoming administration of Dr Mohamed Muizzu and the Ministry of Finance’s preparation for a supplementary budget for the current fiscal year. The outgoing Maldivian Democratic Party (MDP), which holds a majority in the parliament, has pledged full cooperation with the incoming administration in passing the budget.
According to the medium-term fiscal strategy report, the estimated MVR 50 billion budget for 2024 is 5.3% higher than the previous forecast. Expenditures are projected to reach MVR 48 billion, with a total budget deficit of MVR 9.8 billion—amounting to 8.5% of the state’s per capita income. However, with austerity measures, the ministry plans to reduce spending to MVR 44 billion. The budget aims to lower the overall deficit and increase the primary balance by implementing changes in revenue and expenditure policies.
To finance the budget, the Ministry of Finance plans to raise MVR 13.4 billion next year. The ministry also plans to raise MVR 6.1 billion by selling T-bonds in the domestic market. While debt repayment costs for next year are relatively low, the report indicates that disbursements for projects carried out under loan financing are expected to increase.
The current year has seen a budget of MVR 42.8 billion, which is already 77% spent as of last month. A supplementary budget of between MVR 5 to 6 billion is also being planned to cover additional expenditures.
Abdul Raheem Abdullah, Director General of Transition, stated that the new government has been given the opportunity to submit proposals for the supplementary budget as well as for the 2024 budget. If this supplementary budget is approved, the total state budget for this year would reach around MVR 49 billion.
MDP has pledged its full cooperation to President-elect Muizzu’s administration in passing the budget. North Hithadhoo MP and MDP Parliamentary Group Leader Mohamed Aslam clarified that while the party intends to hold the government accountable, it will refrain from any actions aimed at causing difficulties.