Minister of Finance and Planning Moosa Zameer has stated that the State budget for 2026 is designed to ensure fiscal sustainability while continuing to deliver essential public services.

Presenting the 2026 State budget to Parliament on Thursday, Minister Zameer said that when President Dr Mohamed Muizzu assumed office, international financial institutions had warned that the Maldives was at risk of bankruptcy due to years of large deficit budgets and the absence of proper fiscal planning.

He noted that under President Dr Muizzu’s leadership, the Government has achieved significant progress in restoring fiscal discipline. “This year, the State budget has been implemented at a surplus for 40 consecutive weeks,” he said, adding that the country currently holds USD 860 million in foreign reserves, including USD 200 million in usable reserves.

Outlining the key financial goals of the upcoming budget, Minister Zameer said the foremost objective is to continue providing uninterrupted services to the public while creating sufficient fiscal space to fulfil the President’s pledges.

He said the budget’s medium-term fiscal targets include reducing the overall deficit to five per cent of GDP by 2028 and lowering the direct State debt to 117 per cent of GDP. In addition, the Government aims to limit Public Sector Investment Programme (PSIP) expenditure to no more than seven per cent of GDP.

Other targets include reducing guaranteed debt to 10 per cent of GDP by 2028 and capping interest costs at no more than 12 per cent of revenue excluding aid.

Among the operational goals, Minister Zameer highlighted that Government revenue should remain at or above 32 per cent of GDP, recurrent expenditure should be fully financed through revenue, and direct debt should decline over the medium term.

He added that the budget also seeks to maintain domestic PSIP spending at five per cent of income while keeping foreign interest expenditure at five per cent of income.