The government has proposed a state budget of MVR 59.7 billion for 2027, a reduction of MVR 4.5 billion compared to the current year, as it seeks to control expenditure, strengthen public finances and prioritise the completion of ongoing development projects.
Minister of Finance and Government Shareholding Hassan Zareer presented the proposed budget to the People’s Majlis on Thursday, outlining the administration’s financial priorities for the coming year.
The proposed budget totals MVR 59,704,440,795, compared to the MVR 64.2 billion approved for 2026.
Of the proposed expenditure, MVR 42.7 billion has been allocated for recurrent spending, covering the government’s operational costs and the delivery of public services.
Capital expenditure is estimated at MVR 9.9 billion, including MVR 8.2 billion earmarked for the Public Sector Investment Programme (PSIP), which finances infrastructure and development projects across the country.
Total expenditure under the proposed budget is estimated at MVR 52.6 billion.
Presenting the financial plan, Zareer said the budget had been formulated to strengthen economic stability, improve the sustainability of government finances and support the administration’s long-term development objectives.
He described the proposed budget as an important step towards achieving President Dr Mohamed Muizzu’s vision of transforming the Maldives into a developed nation by 2040.
According to the Finance Minister, achieving this ambition will require responsible financial management, sustainable debt levels and investments that deliver meaningful improvements to people’s lives.
A key priority for 2027 will be completing 70 percent of development projects that have already been contracted and are currently underway.
The government intends to focus on delivering existing projects so that communities can begin benefiting from infrastructure investments already committed.
President Muizzu had earlier announced the same target, stating that the administration would give greater priority to completing unfinished projects rather than initiating additional developments.
The proposed budget also projects an increase in government revenue without raising existing taxes.
State revenue and grants are estimated to reach MVR 43.2 billion in 2027, an increase of MVR 1.4 billion compared to this year.
The government expects revenue to continue growing over the medium term, reaching MVR 46.6 billion in 2028 and MVR 49.7 billion in 2029.
Zareer said the administration intends to achieve higher collections by improving the efficiency of tax administration rather than increasing tax rates.
The budget distributes expenditure across 10 major sectors, including healthcare, education, economic development, debt servicing, defence and justice, general public services, social protection, and housing and community amenities.
Healthcare receives the largest individual sectoral allocation at MVR 10.6 billion.
The reduction in the overall budget comes as the Maldives continues efforts to manage its debt obligations and improve fiscal sustainability while maintaining essential public services.
Government expenditure has increased substantially over the past decade, driven partly by infrastructure development, recurrent spending commitments and the cost of servicing public debt.
The proposed financial plan reflects the administration’s efforts to balance these commitments with measures aimed at strengthening the country’s economic position.
Zareer said the budget’s objectives extend beyond managing government expenditure, with an emphasis on expanding economic opportunities and ensuring that development benefits communities throughout the Maldives.
He stressed that the progress achieved through current investments should contribute to building a stronger and more resilient economy for future generations.
The proposed budget will now undergo parliamentary review before lawmakers vote on the government’s spending plan for 2027.
