According to the Ministry of Finance’s 2025 Budget Position Report, state expenditure for the previous year was MVR 5 billion lower than initially projected. While the budget estimated a total expenditure of MVR 49.2 billion, the actual spending amounted to MVR 44.2 billion. This reduction is attributed to the successful implementation of robust fiscal consolidation policies. Consequently, the budget deficit also saw a significant decline, dropping from the projected MVR 9.4 billion to MVR 4.4 billion. This marks the lowest deficit relative to GDP recorded in the past six years. Furthermore, the previous year stands out as the first instance in which state expenses were managed without the need for a supplementary budget.
Regarding state revenue, the figures show an increase of MVR 74.4 million above the initial estimates. This represents the highest revenue collected by the state since 2019, driven primarily by growth in tourism-related fees and non-tax revenue streams. The government highlighted that despite these significant cost-cutting measures, essential public services and social welfare programs remained unaffected.
