Strong budget controls evident with lower YTD deficit

The government's cost cutting measures appear to be working as the year-to-date deficit of the state budget is comparatively lower as of May 16, 2024 compared to the corresponding period last year.

According to the Ministry of Finance, the cumulative total expenditure of the government stood at MVR 14.99 billion as of May 16, while the cumulative state expenditure had risen a little above MVR 17.2 billion in the same period in 2023.

The ministry confirmed that the current budget deficit is MVR 1.8 billion by the review date, compared to a deficit of MVR 4.5 billion observed in the same period last year.

The lower deficit in 2024 is attributed towards lower state expenditure.

While recurrent expenditure observed a moderate increment so far in 2024, capital expenditure is significantly lower as of the review date compared to last year's same period.

As such, recurrent expenditure for the review period is MVR 11.85 billion compared to MVR 11.58 billion in the same period last year, while capital expenditure as of the review date stood at MVR 3.1 billion compared to MVR 5.6 billion last year.

On the revenue front, the cumulative total revenues inclusive of foreign grants reached MVR 13.19 billion by May 16, whereas revenues in year-to-date basis had reached MVR 12.67 billion in the same period last year.

Tax revenue total has reached MVR 10.9 billion so far in 2024; reflecting strong growth in major tax income sources that include Goods and Services Tax (GST), Business and Property Tax and Import Duties. 

Top Tax Revenue Streams

• TGST: MVR 4.33 billion
• GGST: MVR 1.8 billion
• Corporate Income Tax: MVR 1.14 billion
• Import Duties: MVR 1.06 billion
• Withholding Tax: MVR 529.9 million

Despite a notable growth in tax revenues, non-tax revenues saw a decline this year compared to the corresponding period in 2023. As such, non-tax revenue total stood at MVR 2.19 billion as of the review date, compared to MVR 2.93 billion in the same period last year.

Top Non-tax Revenue Streams

• Rent from Resorts: MVR 563.6 million
• Airport Development Fee: MVR 417.1 million
• Registration and License Fees: MVR 326.5 million
• Revenue Fee: MVR 187.7 million
• Expatriate Qyota Fee: MVR 141.4 million

The government amped up its efforts to cut state expenditure with new austerity measures, especially in light of International Monetary Fund (IMF) and World Bank advisories recommending for robust cost cutting measures to reduce state debts.

As of the most recent statistical updates from the Maldives Monetary Authority (MMA), the Public and Publicly Guaranteed (PPG) Debts of the state reached MVR 126 billion by the end of Q1-2024.