State expenditure has declined by 15.1 per cent this year compared to the same period in 2024, while State revenue has recorded a 6.3 per cent increase, according to the Ministry of Finance and Planning’s latest Weekly Fiscal Development Report.

The report, covering the period up to 18 September 2025, shows that MVR 26.7 billion was spent from the State budget, down from last year’s figure for the same period. The decrease was largely driven by a sharp fall in capital expenditure, which dropped by 57.4 per cent.

Recurrent expenditure showed only a marginal decline of 0.2 per cent compared to last year. Of this, 58.5 per cent was spent on administrative expenses of State offices, a reduction of 3.6 per cent. Spending on grants, contribution and subsidies totalled MVR 6.5 billion, a 7.4 per cent decrease compared to the same period in 2024.

Expenditure on debt repayments reached MVR 4.3 billion by 18 September 2025, compared to MVR 1.9 billion during the same period last year, reflecting an increase of around 124 per cent, largely due to higher interest payments on State loans.

Capital expenditure amounted to MVR 3.5 billion, of which MVR 3 billion was allocated to infrastructure such as roads, bridges, and airport development. Under the Public Sector Investment Programme (PSIP), MVR 12.4 billion was allocated in the 2025 State budget, of which MVR 4.2 billion has been spent so far. The overall budget balance remained in surplus at MVR 741.2 million.

Meanwhile, the State collected MVR 27.4 billion in revenue and grants by 18 September, representing a 6.3 per cent increase compared to the same period last year. Tax revenue accounted for 76.5 per cent of the total, with income from Green Tax surging by 102.4 per cent and departure tax rising by 51.1 per cent. Individual income tax collection also grew by 15.7 per cent.

Non-tax revenue increased by 13.7 per cent, boosted by payments for resort lease extensions and fees related to land acquisition and conversion. Airport development fees rose by 51.07 per cent, in line with higher tourist arrivals, which have grown 9.9 per cent this year to over 1.6 million visitors.

With revenue growth, contributions to the Sovereign Development Fund increased by nearly 50 per cent, reaching MVR 1.45 billion. The Ministry noted that by mid-September, the State had achieved 68.8 per cent of its projected revenue and grants for 2025.