The Government presented a budget of MVR 56.6 billion for 2025 on Thursday, with Finance Minister Moosa Zameer detailing the financial plans, anticipated revenues, expenditures, and fiscal reforms. The budget includes projected revenue and grants totaling MVR 39.8 billion, with estimated expenditures at MVR 51 billion, resulting in a deficit of MVR 9.4 billion—the lowest in recent years. Economic growth is forecasted at 6.4% for 2025.

The 2024 budget was initially set at MVR 49.5 billion but was increased to MVR 55 billion following a supplementary budget of MVR 5.5 billion. The 2025 budget dedicates a historic MVR 12.4 billion to Public Sector Investment Programme (PSIP) projects, while also emphasizing expenditure reductions, targeting savings of MVR 6.6 billion through cost-control measures. Key strategies include a shift to a targeted subsidy system, a review and reform of the Aasandha national health insurance scheme, measures to counter oil price fluctuations, restructuring state pensions to prevent redundancy, and reforms in State-Owned Enterprises (SOEs).

Revenue enhancement measures are expected to generate an additional MVR 4.9 billion. Policies focus on dollar revenue sources, with key measures including increased import duties on cigarettes, airport tax adjustments, a rise in green tax rates, a fee for private sand dredging projects, an increase in the Tourism Goods and Services Tax (TGST), and the full application of the destination principle within the GST system. A frequency spectrum charge will also be introduced.

The finance ministry has embedded MVR 11.5 billion in fiscal reforms within the 2025 budget, aiming to stabilize the financial landscape and support targeted development across key sectors. These combined measures represent a strategic approach to strengthen the nation’s fiscal health while advancing key public investments.