Tourism-related revenue has continued to strengthen, contributing to a significant improvement in the budget balance, while subsidies and capital spending under the Public Sector Investment Program (PSIP) remain sustained, according to the Ministry of Finance and Planning’s Fiscal Development Report as of 11 December 2025.

The overall budget balance stood at a deficit of MVR 1.9 billion as of last week, marking an 82.5 per cent reduction compared to a deficit of MVR 10.8 billion recorded during the same period last year. The primary balance recorded a surplus of MVR 2.5 billion, a marked turnaround from a primary deficit of MVR 6.3 billion in the corresponding period of the previous year.

Total Government revenue and grants reached MVR 36.0 billion as of last week, representing an increase of 10.5 per cent compared to MVR 32.6 billion recorded during the same period last year. Total tax revenue stood at MVR 26.9 billion, up 9.2 per cent from MVR 24.7 billion a year earlier.

Among tax categories, Tourism Goods and Services Tax (TGST) recorded the largest increase. TGST collections amounted to MVR 9.9 billion, reflecting a 14.1 per cent rise compared to MVR 8.7 billion collected during the same period last year.

Total Government expenditure stood at MVR 37.9 billion as of last week, representing a decrease of 12.7 per cent compared to MVR 43.4 billion in the corresponding period last year. The report notes that subsidies accounted for the largest increase in spending during the past week. However, total subsidy expenditure amounted to MVR 3.4 billion, a decline of 6.5 per cent from MVR 3.6 billion recorded a year earlier.

Under the Public Sector Investment Program, total expenditure reached MVR 7.3 billion as of last week. Environmental protection and transport sectors accounted for the largest shares of PSIP spending. Expenditure on environmental protection totalled MVR 622.0 million.

Transport remained the largest area of capital expenditure, with total spending reaching MVR 4.4 billion. Of this, airport-related projects accounted for MVR 3.2 billion, reflecting a 4.5 per cent increase compared to MVR 3.0 billion recorded during the same period last year.

The report indicates that improved revenue performance, particularly from tourism, alongside moderated expenditure, has contributed to the continued improvement in the Government’s fiscal position.