Budget surplus holds owing to capital expense cuts

Finance Minister Dr. Mohamed Shafeeg. (Photo/Finance Ministry)

The year-to-date total of state expenditure has reached to MVR 4.08 billion while the year-to-date total of state revenue inclusive of foreign grants reached MVR 4.48 billion, reports the Ministry of Finance.

According to the latest from the ministry, the budget's overall balance for the most recent period, dated as of February 15, 2024, is a surplus of MVR 400.1 million.

This is also the fourth consecutive week of a budget surplus.

The year-to-date total of tax revenues collected, as of the review date, is MVR 3.97 billion - marginally up from the MVR 3.96 billion observed at the corresponding period in 2023. Non-tax revenue total in annual terms reached MVR 505.0 million; significantly down from the MVR 816.3 million observed by the same period last year.

Despite marginal increment in the revenue sources to the state by the review date, the budget surplus felt for the fourth consecutive week is tied mainly to the drop in capital expenditure of the state, and a modest drop in recurrent expenses.

The Maldives government has spent MVR 3.17 billion on recurrent expenses; which encompasses the salaries, wages and pensions of government sector employees and the state's administrative and operational expenses. The figure is modestly down from the MVR 3.77 billion observed by the corresponding period in 2023.

Capital expenditure has observed a significant decline, and is still howering below the billion-Rufiyaa mark at MVR 905.4 million as of the review date. However, by the same period in 2023, state had spent a staggering MVR 2.23 billion on capital expenses.

These expense cuts are a direct result of the current administration's push towards austerity measures and a stronger control of the budget owing to recommendations made by international financial bodies including the World Bank and the International Monetary Fund (IMF) towards the practice.