The Ministry of Finance and Planning has stated that the Government’s fiscal position has strengthened, supported by increased revenue and the successful repayment of sovereign sukuk.

In its Weekly Fiscal Developments report published as of 2 April, the Ministry highlgihted that higher tax revenues, along with the repayment of the USD 500 million sukuk issued in 2021, have contributed to improved fiscal stability.

As of early April, total Government revenue and grants reached MVR 12.4 billion, marking an 11.6 per cent increase compared to MVR 11.1 billion recorded during the same period last year. The overall budget balance also improved, with a surplus of MVR 2.3 billion recorded this year, compared to a surplus of MVR 1.8 billion during the corresponding period in 2025.

A key development during this period was the successful repayment of the USD 500 million sovereign sukuk, along with a coupon payment of USD 24.68 million. The Government made these payments using funds from the Sovereign Development Fund and foreign currency reserves.

The Ministry noted that these developments reflect the results of policy measures introduced from 2024 to increase foreign currency inflows and improve external fiscal conditions. These measures include reforms aimed at boosting revenue and changes to monetary policy, as well as the implementation of regulations requiring the conversion of foreign currency earnings.

As a result, official reserves increased by the end of March 2026, with additional foreign currency accumulated in the Sovereign Development Fund, facilitating the repayment of the sukuk.

The report also highlighted a significant increase in debt repayments. By the end of last week, loan repayments had reached MVR 8.5 billion, compared to MVR 2.4 billion during the same period in 2025, representing a 254.5 per cent increase. Meanwhile, interest expenditure declined from MVR 1.51 billion to MVR 1.08 billion, a decrease of 28.5 per cent.

Tax revenue remains the primary source of Government income. As of last week, total tax revenue stood at MVR 10.0 billion, reflecting a 20.2 percent increase compared to MVR 8.3 billion recorded during the same period last year.

Of this, MVR 5.6 billion was generated from Goods and Services Tax (GST), an increase of 17.8 per cent, while Tourism Goods and Services Tax (TGST) contributed MVR 4.1 billion, up 19 per cent from MVR 3.4 billion in the corresponding period of 2025.