Govt spends MVR 2 Bn in loan repayments

The Maldives government has spent a little over MVR 2 billion in loan repayments, according to the Ministry of Finance.

After months of stagnation, the ministry has updated its public finance statistics following thorough consolidation. The ministry earlier announced that it had to stop publishing the weekly fiscal developments owing to several discrepancies in the finances.

The ministry, while clearing the backlog of the unpublished weekly fiscal developments, has since published all the previously unpublished statistics dating from late-June this year up to October 24^th.

According to the most recent statistical update, the government has spent a total of MVR 2.02 billion in repaying loans. Last year for the same period, the state spent MVR 1.94 billion in meeting its loan repayment obligations.

Statistics further revealed the Maldives government has collected a total revenue of MVR 28.2 billion in annual terms, whereas last year for the corresponding period, the government’s revenue stood at MVR 27.7 billion.

The ministry’s statistics showed that out of the total revenue collected to the government so far in 2024, MVR 21.48 billion has been earned through tax sources while the remaining MVR 6.19 billion came from non-tax sources.

In 2023, for the same period, state had earned MVR 19.75 billion in tax revenues while the cumulative total of non-tax revenue stood at MVR 7.09 billion – indicating that while tax revenues has shown moderate increment, non-tax revenues have slipped this year.

Besides this, the government has also received MVR 561.3 million in grants; which is still lower compared to the MVR 661.9 million received by the same period last year.

The government has spent MVR 37.74 billion out of the budget as of the review date, out of which MVR 27.24 billion has been spent to meet the state’s recurrent needs and another MVR 10.49 billion has been spent on capital expenses.

Under the recurrent expenditure, the government has spent MVR 10.26 billion on salaries, wages and pensions of public sector employees. Another MVR 16.85 billion has been spent on administrative and operational expenses; under which, the government has spent MVR 3.24 billion on subsidies and another MVR 1.73 billion on Aasandha – the state-initiated health insurance scheme.

As per the initially approved MVR 49.8 billion state budget for 2024, the government had earmarked MVR 2.2 billion to meet its loan repayment needs.

Meanwhile, the parliament had given go-ahead for an MVR 5.1 billion supplementary budget on Tuesday, increasing the state budget for this year to MVR 55 billion.

With mounting public debt, the Maldives faces default and other associated risks. International credit rating agencies, Fitch and Moody’s had earlier downgraded their respective ratings to the Maldives as well. These agencies highlighted the high-debt repayment obligations for the Maldives; with the island nation required to repay USD 600 million next year and another USD 1 billion in 2026.