Government expenditure on subsidies rose by 92.4 per cent during the first six months of 2026 compared with the same period last year, the Ministry of Finance and Public Enterprises' fiscal reports show.

The Government provides subsidies to keep the prices of essential goods and services affordable for the public. The Maldives currently operates an indirect subsidy system, under which the Government pays companies that provide subsidised goods and services.

Subsidies are provided across several sectors, including electricity, staple food items, and transport. Weekly fiscal reports published by the Ministry of Finance and Public Enterprises show that subsidy expenditure reached MVR 2.8 billion between 1 January and 10 July 2026.

During the corresponding period in 2025, subsidy expenditure stood at MVR 1.4 billion. This represents a year-on-year increase of 92.4 per cent.

The sharp rise in subsidy spending is largely attributed to fluctuations in global oil prices caused by the ongoing conflict in the Middle East. The impact is reflected in the cost of fuel imports during the first five months of this year compared with the same period last year.

The value of fuel imports during the first five months of 2025 was USD 276.1 million. During the same period this year, fuel imports were valued at USD 498 million, marking an increase of 80.3 per cent.

Despite the increase in global oil prices, subsidies on fuel and electricity have helped shield consumers from higher costs. The Government also introduced subsidised fuel for fishermen this year.