Government Budget Surplus Hits MVR 2.2B Amid Record Debt Repayments

The Maldives has reported a significant state budget surplus of MVR 2.2 billion by mid-April, buoyed by rising revenues and a marked reduction in government spending. According to the Ministry of Finance’s Weekly Fiscal Developments report released on Tuesday, the government collected MVR 11.7 billion in total revenue as of April 17, a year-on-year increase of approximately MVR 700 million.

This fiscal improvement comes despite substantial debt servicing obligations. The government has already spent MVR 2.5 billion on loan repayments within the first four and a half months of the year—a 175.9 percent increase compared to the same period in 2024. The repayments include a major USD 100 million payment to Cargill Financial Services made in March.

The revenue uptick has been largely driven by tax collections. Withholding tax led revenue streams in the latest week, followed closely by robust earnings from the Tourism Goods and Services Tax (TGST), which generated MVR 3.7 billion—up from MVR 3.4 billion the previous year. Green Tax revenue also surged to MVR 572.5 million, reflecting a jump of over 70 percent, while the Airport Development Fee rose to MVR 452.6 million from MVR 327 million last year.

The report attributes the revenue gains to both policy changes and economic recovery. Revised tax and fee rates implemented in January, coupled with increased tourist arrivals, bolstered collections from departure taxes and airport-related fees. Tax revenue accounted for 77.1 percent of all receipts, while non-tax revenue contributed 22.3 percent. In total, 29.3 percent of the revenue and grants forecasted in the 2025 budget have been realised, with non-tax revenue reaching MVR 2.6 billion.

On the expenditure front, the government has spent MVR 9.5 billion so far this year, a notable decline from the MVR 12.7 billion recorded during the same period last year. This reduction represents a 25.3 percent drop in both recurrent and capital expenditures. Salaries, allowances, and pensions made up MVR 3.6 billion of the total, while administrative costs stood at MVR 5.2 billion. Capital expenditure saw a dramatic fall to MVR 743.1 million, compared to MVR 3.2 billion in 2024.

Despite the ongoing burden of debt repayments, the state’s prudent fiscal management and increased revenue intake have positioned the Maldives to maintain a healthy budget surplus. The Ministry of Finance noted that as of mid-April, only 19.3 percent of the total expenditure allocated in the 2025 budget has been utilised, suggesting ample fiscal space for the remainder of the year.

The latest data signals cautious optimism for the Maldives’ economic trajectory, reflecting both stronger-than-expected revenue performance and disciplined expenditure practices in the face of rising debt obligations.