Government expenditure hits MVR 12 billion H1 2018

Photo: Maldives Independent

Maldives Monetary Authority (MMA) has revealed the government expenditure increased MVR 3.1 billion in annual terms (excluding amortization) in the first half of 2018 in comparison with last year’s same period.

The central bank’s quarterly economic review confirmed the Maldivian state’s expenditure for the first half (H1) of 2018 reached MVR 12.0 billion which was mainly due the upsurge in current expenditure and also due to considerable growth in capital expenditure.

The state’s current expenditure and capital expenditure for the first half of 2018 accounted for 69% and 31% of the total expenditure respectively. However, this is less than 48% budgeted amount for the year’s first half.

Current expenditure of the state increased by MVR 1.5 billion to hit MVR 8.3 billion by H1 2018 which was mainly attributed by higher administrative and operational expenses. One of the reasons for this upsurge is expanded spending on the national health insurance scheme, Aasandha.

Another reason for the increase was experienced due to the reinstatement of subsidy on staple food items in April 2018 which according to MMA’s quarterly economic review saw “a growth in the expenditure on subsidies.”

Salaries and wages, which contributes to the highest share of the state’s current expenditure showed growth in the period, due to increase in allowances to public sector employees. Additionally, the “interest payments and financing costs were also observed to have increased during the period” because of the upsurge in foreign debt.

Meanwhile capital expenditure grew by MVR 1.6 billion to reach MVR 3.8 billion in H1 2018. This result was realized due to the increased spending on PSIP, especially for infrastructure projects which are comparatively high-profile than previous years; these included the Sinamale’ Bridge, Male’ re-development project as well as the mega projects of Velana International Airport’s expansion and the 25-storey Dharumavantha Hospital.

In addition to this the government spending on other developmental projects along with capital equipment increase also reflected on the upsurge in the capital expenditure.

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