Minister of Finance and Planning Moosa Zameer presented the State Budget for 2026 to the People’s Majlis today, declaring it as a leaner, more responsible fiscal plan that prioritizes debt repayment, economic stability, and sustainable growth.
In his address, delivered under Article 96(a) of the Constitution and Article 32(a) of the Public Finance Act, Minister Zameer began by invoking gratitude to Allah and recalling the economic difficulties inherited when President Dr Mohamed Muizzu took office in November 2023.
Stabilizing After Crisis
Minister Zameer said that when the current administration assumed office, international financial institutions had warned that the Maldives was “at high risk of debt distress” with reserves plunging to historic lows.
“By the end of 2023, the state’s official reserves had fallen below USD 591 million, and usable reserves were below USD 100 million” he stated.
He attributed the crisis to unsustainable fiscal policies, repeated supplementary budgets, and the failure of past governments to secure proper foreign financing.
Zameer recalled that the USD 500 million sukuk issued in 2021 and the USD 100 million bond issued earlier now fall due in 2026, calling them “heavy obligations inherited from previous governments”.
Fiscal Turnaround Under Muizzu
Minister Zameer said the government swiftly acted to stabilize finances, restructure debt, and restore investor confidence.
“In the first 40 weeks of this year, the government has operated with a continuous surplus” he said.
“Today, official reserves stand at USD 860 million, and usable reserves have increased to USD 200 million”.
He projected that official reserves will reach USD 848.6 million by 2025 and USD 903.7 million in 2026, supported by new foreign exchange regulations and stronger fiscal management.
2026 Budget Figures
The total budget for 2026 is MVR 64.2 billion, which includes MVR 9.3 billion for sukuk and bond repayments. Excluding those repayments, the core budget is MVR 55 billion, smaller than the 2025 budget, aligning with President Muizzu’s statement that this year’s plan is “smaller, but more responsible”.
Key figures:
- Total Budget: MVR 64.2 billion
- Core Budget: MVR 55 billion
- Revenue and Grants: MVR 40.3 billion
- Tax Revenue: MVR 31.3 billion
- Non-tax Revenue: MVR 8.7 billion
- Deficit: MVR 9.4 billion
- GDP Growth (2026): 5.3 percent
Stronger Growth, Rising Confidence
The Minister said economic growth is expected to accelerate to 5.3 percent in 2026, supported by tourism, construction, and real estate. Between 2026 and 2028, average growth is projected at 4.9 percent.
He noted a 9.4 percent increase in tourist arrivals this year, with China, Russia, the UK, and European markets driving recovery. The Velana International Airport’s new terminal and regional airport upgrades are expected to further expand tourism, generating an estimated MVR 2.3 billion in airport development fees next year.
Fiscal Discipline and Debt Sustainability
Minister Zameer outlined the government’s medium-term fiscal targets, including:
- Reducing the overall deficit to 5 percent of GDP by 2028
- Bringing direct state debt to 117 percent of GDP
- Capping PSIP expenditure at 7 percent
- Limiting interest expenses to 12 percent of revenue
- Reducing guaranteed debt to 10 percent of GDP
“Our fiscal policy is built on discipline” he said. “We are repaying debts taken irresponsibly by past governments, while maintaining stability without new burdens on citizens”.
He emphasized that the Sovereign Development Fund has been restructured into a dollar-managed fund, now holding over USD 100 million dedicated to debt repayment.
People-Centered Priorities
Of the total budget, MVR 39.9 billion or 62 percent is allocated for recurrent expenditure, including pay harmonization and salary adjustments for civil servants. The Public Sector Investment Program (PSIP) totals MVR 9.3 billion, focused on infrastructure, housing, and regional development.
The Minister said the 2026 budget is designed to ease the debt burden, strengthen financial stability, and bring tangible benefits to citizens through investments in healthcare, education, and housing.
“This is a budget built to lift the nation from inherited debt, ensure long-term economic security, and deliver true development to the Maldivian people” Zameer declared.
Closing Message
Minister Zameer concluded his address with a call for unity and parliamentary cooperation:
“I ask this esteemed Majlis to approve this budget as presented. Let us together make 2026 a year of prosperity, financial strength, and improved living standards for our people”
He ended with prayers for the nation’s success and blessings upon the Maldivian people.
Summary
The 2026 Budget presented by Minister Zameer encapsulates President Muizzu’s economic vision: a smaller, debt-conscious core budget, renewed reserve strength, and a commitment to responsible governance—transforming an inherited financial crisis into a platform for sustainable national progress.
