In a resounding victory for fiscal responsibility and economic reform, the government of President Dr. Mohamed Muizzu has transformed a staggering MVR 4.7 billion deficit recorded in mid-2024 into a budget surplus of over MVR 1 billion by July 2025 — marking one of the most dramatic fiscal turnarounds in recent Maldivian history.
The latest Weekly Fiscal Developments report by the Ministry of Finance reveals that from 1 January to 17 July 2025, total revenue and grants reached MVR 20.5 billion, outpacing expenditure of MVR 19.5 billion. This shift stands in stark contrast to the same period in 2024, when revenues lagged behind a bloated MVR 23.7 billion in spending, leaving the nation in fiscal red.
📈 From Deficit to Discipline
Under President Muizzu’s leadership, the government has delivered a net fiscal swing of over MVR 5.7 billion in just one year. The overall balance improved from a MVR 4.68 billion deficit in 2024 to a MVR 1.06 billion surplus in 2025, while the primary balance — which excludes interest costs — surged from a MVR 2.2 billion deficit to a MVR 3.48 billion surplus.
This transformation was achieved not by slashing essential services, but through strategic restraint in capital expenditure, improved public finance management, and stronger domestic revenue collection.
💰 Revenue Rebounds as Tax Base Expands
- Tax revenue rose to MVR 15.66 billion in 2025, up from MVR 14.98 billion the previous year — an increase powered by tourism GST, which alone contributed MVR 6.2 billion.
- Non-tax revenue jumped by 28% year-on-year, reaching MVR 4.69 billion, thanks to increased collections from resort rents, airport charges, and green tax.
- While foreign grants fell by more than half (from MVR 350.6 million to MVR 165.3 million), domestic revenue growth more than offset the decline.
🔻 Controlled Spending Without Sacrificing Welfare
Total expenditure dropped from MVR 23.7 billion in 2024 to MVR 19.5 billion in 2025 — a 17% reduction. This was primarily achieved through:
- A strategic cut in capital expenditure, slashed by more than MVR 3.6 billion.
- Maintained recurrent spending, ensuring continued support for:
- Subsidies (MVR 1.68 billion)
- Aasandha (MVR 1.1 billion)
- Education (MVR 1.9 billion)
- Health and hospitals (over MVR 1.9 billion collectively)
- Security services (MVR 2.3 billion across MNDF and Police)
🛡️ Investing in the Future
The administration also increased transfers to the Sovereign Development Fund (SDF) to MVR 1.1 billion — up from MVR 728 million last year — reinforcing long-term economic security and reducing reliance on external debt.
Meanwhile, the government continued to invest in critical sectors, including airports (MVR 882 million), housing, and public infrastructure, albeit with greater efficiency and focus.
🗣️ A Victory for Responsible Governance
This fiscal turnaround is not a coincidence — it is the direct result of President Muizzu’s unwavering commitment to restoring economic order. Unlike the previous administration’s unsustainable spending model, the current government has proven that fiscal discipline, social responsibility, and national development can go hand in hand.
The numbers speak for themselves. While 2024 was marked by unchecked deficits and ballooning capital outflows, 2025 has become a year of recovery, responsibility, and renewed public confidence in economic governance.
President Muizzu’s administration has not only reversed a dangerous fiscal trajectory but has also laid the foundation for a more stable, resilient, and self-reliant Maldives. From reckless spending to strategic surplus — the new Maldives is being built on responsibility, not rhetoric.
