Public expenditure exceeds income by 31 per cent

At the end of the eight month of this year, government’s expenditure has surpassed a staggering MVR 8 billion, an amount that exceeds government income by 31 per cent.

The statement of government income and expenditure published by the Ministry of Finance and Treasury on a weekly basis states that by the 6th of this month, government expenditure was at MVR 8.7 billion, while income was at 6.6 billion.

The details show that a vast amount of the expenditure was on recurrent, with 6.1 billion spent on various items under the head. Only 1.1 billion was spent as capital expenditure. Loan repayment and loan dispensation figure was given to be 1.4 billion.

The largest item under the recurrent head is salary and allowance for government employees. 3.2 billion was spent as salary and allowances, while running costs of government offices summed up to be 2.95 billion. 71.8 million was spent on transportation.

When particular offices are considered, the Ministry of Education stands out as the costliest government agency. 1.3 billion was spent on education sector, while the Ministry of Health spent 1.1 billion during the period, taking the place of the second highest spender. 2.9 billion was spent from the Special Budget at the Ministry of Finance.

The Ministry of Finance had previously estimated that the 14 billion Rufiyaa budget set for this year would reach 18 billion by the end of the year, with a deficit of 3.4 billion. While IMF has expressed “concern about the persistently rising deficit in the Maldivian budget”, it has been estimated that the budget would run a deficit of 27 per cent by the close of the year.

The new government has faced a lot of difficulties after it took over from the administration of Nasheed which was “mismanaging the economy to economic suicide”, and taken various measures to cut down the government expenditure. One such measure has been a cut on all government office-budgets by 15 per cent. However, such measures are not sufficient according to many experts, who see a time of economic hardship for the Maldives which is unprecedented in recent history.