In a clear demonstration of fiscal discipline, the Ministry of Finance’s Weekly Fiscal Development Report shows that as of 12 June 2025, the Maldives has repaid MVR 3 billion in debt—nearly triple the MVR 1.1 billion repaid in the same period last year. That represents a net increase of approximately MVR 1.9 billion in debt servicing.
This surge in repayments comes amid strategic budget tightening. Total state expenditure stands at MVR 20.6 billion, marking an 8.7 percent drop from last year’s MVR 22.5 billion for the same period. Recurrent and capital outlays were deliberately reduced, demonstrating more disciplined planning.
Meanwhile, state revenues and grants climbed to MVR 17 billion, a 6 percent increase compared with MVR 16 billion last year. This uptick reflects the strength of enhanced tax collections linked to tourism-boosted revenue models.
These combined efforts resulted in a MVR 1.3 billion budget surplus—evidence that debt reduction and fiscal stability are not mutually exclusive.
Under President Dr Mohamed Muizzu’s leadership, these developments underscore a cohesive economic strategy. From January to April, his administration prioritized debt servicing, with MVR 2.5 billion in repayments already made. This came with a preliminary surplus of MVR 1.9 billion, which rose to MVR 3.5 billion once debt payments were excluded.
The President also announced that foreign exchange reserves grew to USD 791 million by March—up from USD 371 million in September, reflecting the tangible impact of this fiscal tightening.
In the first quarter, revenues soared—USD 726 million—while expenditures remained restrained at USD 590 million. Tourism-related levies, including the TGST and green tax, played a central role—contributing USD 233 million and USD 36 million, respectively. This fiscal prudence yielded a surplus of USD 138.6 million, up from just USD 22.8 million last year.
Why this matters:
- Fiscal discipline confirmed: Prioritizing debt reduction alongside reduced spending directly signals government accountability.
- Surplus achieved: A MVR 1.3 billion surplus demonstrates tangible success in policy execution.
- Revenue resilience: Growth in tourism-linked revenues underlines sustainable economic support.
- Reserve rebuilding: Strengthened foreign exchange reserves amplify financial security.
President Muizzu’s administration sends a clear message: the Maldives is purposefully free from reckless borrowing. The recalibrated budget exhibits both financial strength and strategic foresight. Despite remaining challenges such as high public debt and modest capital investment, this report highlights a government firmly in control—navigating carefully toward sustainable growth and fiscal sovereignty.
