State spending on salaries and allowances rises by MVR 470 million in first five months

Expenditure on salaries, allowances and pensions for government employees rose by MVR 470 million in the first five months of this year compared to the same period last year, according to the latest figures from the Finance Ministry.

The ministry’s data shows the state spent MVR 5.31 billion on salaries and allowances as of 14 May, up from MVR 4.84 billion during the same period last year, an increase of MVR 470 million.

Under the government’s salary harmonisation policy, 93 percent of state institutions have now been shifted to the new pay framework. However, the transition resulted in reduced pay for legal staff, HR staff and council employees.

President Dr Mohamed Muizzu last month acknowledged concerns raised by employees whose salaries were reduced during the harmonisation process. He said all such cases had been identified and resolved in time for this month’s salary payments.

The rise in payroll spending comes as the Maldives continues to face mounting debt, with international financial institutions repeatedly urging the government to curb expenditure. The Finance Ministry’s recent weekly fiscal reports also show recurrent spending, particularly salaries and subsidies, rising faster than revenue growth this year.

There are currently more than 35,000 civil servants and around 38,000 employees working in state‑owned companies. In addition, the government is estimated to employ thousands of political appointees.

The rise in payroll spending comes at a time when recurrent expenditure is climbing across the board. Finance Ministry data shows subsidies alone have increased by more than MVR 800 million this year, while total recurrent spending has grown by nearly MVR 2 billion compared to the same period last year. Despite higher revenue, driven mainly by Business Profit Tax and income‑tax inflows, the government continues to face pressure to rein in spending as debt levels rise.