2025 Records Lowest State Budget Deficit in Six Years

According to the "Budget Outcome Statement 2025" released by the Ministry of Finance and Public Enterprises, the Maldives' fiscal deficit—the gap between revenue and expenditure—dropped to MVR 4.4 billion in 2025. This marks the most significant reduction in the deficit within the past seven years.

This outcome is substantially lower than the initial projections set in the approved 2025 budget. When the Ministry submitted the budget on October 31, 2024, the deficit was estimated at MVR 9.4 billion. However, upon implementation, the actual deficit was reduced by MVR 5.0 billion, a 53.6% decrease from the original forecast.

In terms of the deficit-to-GDP ratio, the 2025 deficit stood at 3.6%. This represents a major fiscal improvement compared to previous years: 9.9% in 2024, 10.5% in 2023, 8.4% in 2022, 10.0% in 2021, and 16.6% in 2020. The statement highlights that 2025 recorded the lowest deficit since 2020.

The Ministry of Finance attributed this achievement to stringent cost-cutting measures and effective structural changes in the management of government investment projects. Total expenditure for 2025 was MVR 44.2 billion, which is MVR 5.0 billion less than the projected MVR 49.2 billion.

Furthermore, the fiscal year 2025 concluded without the need for a supplementary budget. The statement noted that 2025 was the only year in the last five years where expenditures were managed strictly within the initially approved budget without requiring mid-year additional funding.

Positive revenue performance also bolstered the budget outcome. While the 2025 budget estimated total revenue and grants at MVR 39.8 billion, the actual realized revenue reached MVR 39.9 billion—an increase of MVR 74.4 million over the projections.

Despite fluctuations in some sectors, overall revenue remained aligned with estimates. Shortfalls in certain areas were offset by strong performance in non-tax revenue streams, including resort lease extension fees, land sale and transfer fees, and work permit fees.

Tourism performance also closely mirrored projections. While the forecast anticipated 2,248,120 tourist arrivals for 2025, the actual figure was 2,246,516—a minor difference of 1,604 arrivals. However, total tourist bed nights reached 14,212,866, exceeding the projected 14,151,165.

The year 2025 stands as the year with the highest total revenue and grants received by the state since 2019. Compared to the MVR 35.1 billion recorded in 2024, revenue in 2025 grew by MVR 4.8 billion.