The Mohamed Muizzu administration’s proposed National Budget 2025 seeks significant reductions in spending on essential services while increasing wasteful government spending, the opposition Maldivian Democratic Party (MDP) has said.
Ibrahim Ameer, former Minister of Finance under the Ibrahim Mohamed Solih administration, highlighted at a party press briefing that the proposed 2025 budget increases taxes, expenditure, and debt.
The budget, which was presented as one that would keep spending low, includes spending increases in several areas, according to the MDP.
“For example, subsidies, Aasandha [health management scheme], basic pension for the elderly, and council grants have been cut by MVR 3 billion from the proposed budget… However, in addition, an additional MVR 3.8 billion has been budgeted for government waste; most noticeably, expenditure on transport, ministries, and other agencies is increasing [next year],” he said.
The Muizzu administration has included about MVR 3.8 billion to spend on “waste” by reducing expenditure on basic services, he said.
According to the Muizzu administration, the MVR 56.6 billion for 2025 reflects the lowest deficit, in terms of GDP, since 2019. During presentations, Minister of Finance Moosa Zameer said the budget deficit for next year would be MVR 9.4 billion, with the state expected to receive MVR 39.8 billion in grants and revenue expected at MVR 51 billion.
With the economy expected to grow 6.4 percent next year, the projected MVR 9.4 billion deficit, according to Zameer, constitutes the lowest in recent history.
However, the MDP dismissed the administration’s claims.
“They have done this with mathematical fraud,” Ameer said.
Highlighting certain allocations, the former Finance Minister pointed out irregularities in the budget’s presentation compared to previous years.
“Loans and capital to state-owned companies had, in the past, been included as expenditure. They have not included loans and capital injections to state-owned companies as an expenditure in their 2025 budget. They have marked it as an off-balance sheet item,” he said going on to explain that such tactics make comparing the deficit with pervious years unrealistic.
According to Ameer, when compared fairly to previous years, the 2025 deficit is significant, as the deficit for 2021 would then be at MVR 8.8 billion, with that of 2022 at MVR 8.4 billion.
“So it is trick mathematics to say that the deficit in terms of the proposed 2025 budget is small compared to other years,” Ameer said.
