Govt. spending on salaries increase by 14% at MVR 5.6 billion

Government expenditure on salaries has increased by 14 percent this year, reaching MVR 5.6 billion, according to figures released by the Finance Ministry.

The Ministry’s latest weekly fiscal report, which outlines government revenue and expenditure as of August 15, shows that the state has received MVR 31.9 billion in revenue and grants so far this year. However, total expenditure has exceeded revenue, amounting to MVR 36.4 billion.

A substantial share of government spending is attributed to recurrent expenditure, which covers salaries, pensions, and administrative and operational costs. Recurrent expenditure currently stands at MVR 31.3 billion, including MVR 12 billion spent on salaries, wages, and pensions.

Of this amount, MVR 5.56 billion was spent on salaries and wages, compared to MVR 4.87 billion during the same period last year. Expenditure on allowances reached MVR 4.73 billion, representing a 7.9 percent increase from the previous year.

Meanwhile, spending on pensions and retirement benefits rose to MVR 1.76 billion, up from MVR 1.62 billion during the corresponding period last year.

Finance Ministry has previously attributed the increase in salary-related expenditure to the implementation of the pay harmonisation policy, which introduced salary increments across various sectors.

Harmonising civil servant salaries is a key presidential pledge of President Dr. Mohamed Muizzu. Under the policy, salary increases were implemented in November last year for approximately 20,000 employees, including local council administrative staff, civil servants, and judicial employees.

The increase in government spending on salaries and allowances comes as the Maldives faces significant debt challenges, with the country required to meet more than USD 1 billion in external debt obligations this year.

According to the Ministry’s latest figures, MVR 12.9 billion was allocated for debt servicing this year, of which MVR 10.1 billion has been utilised so far.

International financial institutions have repeatedly urged the Maldives to implement fiscal consolidation measures and curb government expenditure amid the country’s mounting debt burden.