During the first half of this year, the state generated a total revenue of MVR 22.4 billion. However, with total expenditures reaching MVR 23.3 billion, the budget recorded a deficit of MVR 975.9 million. The primary drivers for this increase in spending include a 92% rise in expenditure on fuel and commodity subsidies to stabilize prices, alongside higher personnel costs following the implementation of the pay equalization policy.
Tax revenue during this period saw a significant growth, increasing by MVR 2 billion compared to the previous year to reach a total of MVR 17.2 billion. Notable growth was observed in Business and Corporate Income Tax. Additionally, grant assistance exceeded initial budgetary projections. Despite the overall budget deficit, the Ministry of Finance reported a “Primary Surplus” of MVR 1.7 billion. This indicates that the state’s revenue is sufficient to cover its operational expenditures when excluding debt servicing and interest payments.
