Maldives’ State Expenditure Falls 15.6% Compared to Last Year

Government expenditure from the state budget has dropped by 15.6 percent compared to the same period last year, according to the Ministry of Finance’s latest Weekly Fiscal Development Report. By August 28, 2025, total state spending stood at MVR 24.8 billion, marking a significant decline in both recurrent and capital expenditure.

The report shows that recurrent expenditure fell by 1.7 percent, while capital expenditure recorded a drastic 57.4 percent reduction. Of the recurrent spending, 56 percent went toward administrative operations of government offices—5.5 percent lower than last year. Spending cuts were most notable in office supplies (down 14.1 percent), repair and maintenance costs (down 16.6 percent), and travel expenses (down 6 percent). Various state-funded subsidies and aid also fell by 7.5 percent.

Capital expenditure stood at MVR 3.1 billion by the end of last week, with MVR 2.7 billion allocated to infrastructure projects such as road construction, bridges, and airport development. However, spending under the Public Sector Investment Program (PSIP) lagged significantly behind allocations. Out of the MVR 12.4 billion budgeted for PSIP this year, only MVR 4 billion has been spent so far. Unlike last year, when large sums were directed toward land reclamation and road construction, this year’s PSIP spending has been largely focused on easing transportation challenges, with MVR 2.5 billion channeled into related projects. Housing initiatives accounted for MVR 124.6 million.

The Ministry of Finance noted that adjustments to PSIP-related policies have contributed to lower disbursements this year. Despite reduced spending, the state budget maintains a surplus of MVR 534.6 million as of August 28.