President Dr Mohamed Muizzu stated today that the government’s 2026 budget is smaller than last year’s once debt repayments are excluded, describing it as a leaner, more disciplined fiscal plan despite the headline figure appearing larger due to major sukuk and bond obligations.
Core Budget Smaller, Not Larger
In a post shared on social media, President Muizzu explained that while the total budget submitted to the People’s Majlis stands at MVR 64.2 billion, it includes MVR 9.3 billion in one-off debt repayments. Removing that portion, the core budget is MVR 55 billion, which is lower than the 2025 budget.
“The inclusion of sukuk and bond repayments makes the overall number look larger, but the actual government spending on national programs and services is smaller” the President noted, framing the 2026 plan as a demonstration of fiscal responsibility and targeted public investment.
Revenue and Economic Outlook
Finance Minister Moosa Zameer announced that revenue for 2026 is projected at MVR 40.2 billion, with tax revenue at MVR 31.3 billion and non-tax revenue at MVR 8.7 billion. He said grants are minimal at MVR 373.6 million, as the government prioritises domestic revenue generation over external dependency.
He added that tourism growth and the full operation of the new Velana International Airport terminal will significantly boost earnings. The government expects to collect MVR 2.3 billion in airport development fees next year, reflecting higher visitor traffic and expanded airport operations across the country.
Spending Priorities and Debt Service
Of the total budget, MVR 39.9 billion is allocated to recurrent expenditure, representing 62 percent of the plan, while MVR 9.3 billion will fund capital projects such as infrastructure and regional airport development.
The larger nominal budget is primarily due to debt repayments, including USD 500 million (MVR 7.7 billion) in sukuk maturing in April 2026 and USD 100 million (MVR 1.5 billion) in bonds issued in 2022. These repayments, the President said, reflect the government’s commitment to honouring financial obligations while streamlining core expenditures.
Smaller Deficit, Focus on Essentials
The budget deficit for 2026 is projected at MVR 9.4 billion, the smallest proportionally in recent years, signalling a shift toward fiscal consolidation. The government expects GDP growth of 5.2 percent, driven by tourism, logistics, and construction.
Health and Social Sectors Prioritised
Minister Zameer confirmed that healthcare remains the highest-funded sector, followed by education and youth development, aligning with President Muizzu’s agenda to strengthen public services and social protection while maintaining spending discipline.
By highlighting the MVR 55 billion core figure, President Muizzu reinforced his administration’s message that the 2026 budget is strategically smaller and more efficient, ensuring debt repayment without compromising national progress.
