The Government has outlined new fiscal targets aimed at reducing State debt and restoring long-term financial stability.

While presenting the proposed 2026 State budget to the People’s Majlis, Minister of Finance and Planning Moosa Zameer announced that the Government plans to lower the overall fiscal deficit to five percent of GDP by 2028 and reduce direct State debt to 117 per cent. He added that Public Sector Investment Programme (PSIP) spending will be capped at seven per cent of total expenditure, while interest payments will remain below 12 per cent of State income.

Minister Zameer said the Administration intends to bring guaranteed debt down to 10 per cent by the end of 2026 and ensure that revenue remains steady at no less than 32 per cent of GDP. He noted that domestic financing will account for no more than 70 per cent of PSIP funding, while interest payments to foreign lenders will be limited to five per cent of their income.

He further stated that fiscal discipline and reliable revenue generation are essential to achieving these goals. The Minister also highlighted the Government’s responsibility to meet USD 600 million in sukuk and bond repayments due in April 2026. He said the proposed budget was designed to relieve the debt burden on future generations, promote fiscal sustainability, and ensure that public spending translates into tangible benefits for Maldivians.