The biggest target of the proposed state budget for 2023 is to acknowledge economic risks and ensure the sustainability of Maldives’ external debt, states Finance Minister Ibrahim Ameer.
Ameer attended the parliamentary sitting on Wednesday morning to speak about the 2023 state budget of MVR 42.7 billion.
Addressing the floor, Ameer noted the budget comes amid a global economic crisis.
“We submitted the 2023 budget and the budgets the years before as the entire world, including Maldives, faces multiple economic challenges. In 2020, it was the Covid-19 pandemic, and in 2022, this year, we face the economic crisis resulting from the unprecedented Russia-Ukraine war,” he said.
Ameer said that though Maldives’ GDP declined by 33.5 percent due to the Covid-19 pandemic in 2020 – when Maldives had to shut down its borders – cutting off access to its main economic driver – the tourism industry.
He said the policies implemented by the Maldivian administration had been successful in increasing GDP by 41.6 percent in 2021.
With the growth in the tourism industry and other key industries, the Maldivian economy is expected to grow by approximately 13 percent, said Ameer.
Ameer presented the proposed MVR 42.7 billion state budget to the Parliament in late October. The projected expenditure is listed as MVR 40.1 billion, and the projected income is MVR 32.1 billion.
The projected income includes a projected MVR 3.7 billion injection with the proposed hike in GST and TGST – which is expected to kick in 2023.
The projected total tax income is MVR 23.5 billion and the projected non-tax income is MVR 6.4 billion.
Ameer said in the wake of the huge fiscal deficit 2020, the Maldivian administration is currently working on a trend to minimize the deficit.
The deficit-to-GDP ration had been at 13.8 percent in 2021, and 14.3 percent in 2022. Ameer said the Maldivian administration expected to reduce the deficit-to-GDP ratio to 8.1 percent in 2023.
Parliament began its debate on the 2023 budget Tuesday.