The Ministry of Finance and Public Enterprises has said State revenue remains sufficient to cover recurrent expenditure, with the Government recording a primary surplus of MVR 1.7 billion, according to the latest Weekly Fiscal Development Report.

The report shows Government expenditure reached MVR 23.4 billion as of 2 July, an increase of MVR 4.2 billion, or 21.7 per cent, compared with MVR 19.2 billion during the same period last year. The rise was mainly driven by higher spending on salaries and employee allowances.

Subsidy expenditure also increased by MVR 1.4 billion as the Government continued measures to offset higher global oil and commodity prices linked to the ongoing conflict in the Middle East. Spending on salaries and wages rose 13.9 per cent to MVR 3.7 billion, while total expenditure on salaries and pensions reached MVR 8.0 billion. Recurrent expenditure stood at MVR 20.3 billion, with capital expenditure on development projects increasing to MVR 3.0 billion.

State revenue and grants totalled MVR 22.4 billion, up MVR 2.1 billion, or 10.4 per cent, from the MVR 20.3 billion recorded during the same period in 2025.

Tax revenue remained the Government's largest source of income, rising 13 per cent to MVR 17.3 billion. Corporate income tax collections reached MVR 1.7 billion, an increase of MVR 97.7 million, or 6.2 per cent, while Goods and Services Tax (GST) generated MVR 9.6 billion, comprising MVR 6.6 billion from Tourism GST and MVR 2.9 billion from General GST.