Government on Thursday presented a budget proposal of MVR 56.6 billion for 2025. 

Finance Minister Moosa Zameer outlined key allocations, anticipated revenues, expenses, and fiscal reforms aimed at stabilising the nation’s financial footing.

The budget forecasts MVR 39.8 billion in revenue and grants, against projected expenditures of MVR 51 billion. This results in a budget deficit of MVR 9.4 billion, which is notably the lowest in recent years. The government also projects an economic growth rate of 6.4 percent for 2025. For 2024, the approved budget was MVR 49.5 billion, which increased to MVR 55 billion after a supplementary budget of MVR 5.5 billion was approved.

Public Sector Investment Programme (PSIP) projects receive a record allocation of MVR 12.4 billion for 2025. Alongside substantial project funding, the government is focusing on expenditure reduction, aiming for savings of MVR 6.6 billion through strategic cost-cutting initiatives. These include shifting to a targeted subsidy system, revising the Aasandha national health insurance scheme, addressing risks from oil price volatility, reviewing state pensions, and reforming State-Owned Enterprises (SOEs).

To boost revenue, the budget proposes measures expected to generate MVR 4.9 billion, prioritising dollar-generating sources. Planned measures include increased import duties on cigarettes, a bidding process for licenses, adjustments to airport and green tax rates, a new fee for private sand dredging, and an increase in the Tourism Goods and Services Tax (TGST). The government also intends to implement the GST destination principle fully and levy a frequency spectrum charge.

The budget embeds fiscal reforms totalling MVR 11.5 billion, aiming to strengthen financial resilience and support targeted development projects in priority sectors. Through these reforms, the government seeks to balance fiscal health with sustainable growth for the Maldives.