In today's parliamentary session, the Government of Maldives presented a supplementary budget of MVR 5.1 billion, marking the first proposal from newly appointed Minister of Finance, Moosa Zameer. Zameer, who took office on September 30, outlined the additional budget, which is set to increase the country's overall budget deficit to MVR 18 billion.
Key Funding Gaps
According to the Ministry of Finance, a significant portion of the new budget—MVR 2 billion—has been allocated to Public Sector Investment Program (PSIP) projects. These projects required extra funding after initial estimates in the original 2024 budget fell short. The PSIP projects focus on critical infrastructure and development across the country.
Breakdown of the Supplementary Budget
The supplementary budget has been divided across several key sectors, addressing urgent funding needs in various areas. Here's a closer look at the key components:
- PSIP Projects: MVR 2 billion
- Subsidies (fuel, staples, electricity, water, sewerage): MVR 1 billion
- Student Loans: MVR 458 million
- State-Owned Enterprises (SOEs): MVR 441 million
- National Social Protection Agency (NSPA): MVR 263 million
- Medical Consumables: MVR 200 million
- Salaries: MVR 24 million
Why is Additional Funding Necessary?
The Finance Ministry explained that the additional MVR 2 billion for PSIP projects is crucial, given the government’s over-budget spending on key initiatives. The initial budget underestimated the amount needed for these programs, leaving the government with a funding shortfall.
Similarly, SOEs required an extra MVR 441 million to support new projects and provide MVR 150 million in capital for the newly established Development Bank. Meanwhile, the student loan budget also increased to meet the government’s expanding loan scheme, which now covers more students than originally planned.
Subsidy Challenges and Reforms
One of the more notable areas of the supplementary budget is the MVR 1 billion allocated for subsidies. The original 2024 budget projected savings of MVR 2.5 billion from subsidy reforms, but these reforms were not implemented as anticipated. As a result, the government is now allocating more funds to cover essential subsidies for fuel, electricity, water, and staple goods. The total subsidy budget for 2024 now stands at MVR 3.8 billion.
Total State Expenditure and Revenue Forecast
With the introduction of the supplementary budget, the total state expenditure for 2024 could reach MVR 55 billion, significantly higher than the initially approved MVR 49.5 billion. The Finance Ministry estimates that MVR 39.2 billion has already been spent, with an additional MVR 640 million expected in revenues. Total revenue for the year is forecasted to hit MVR 34 billion by the end of 2024.
