Finance Minister Moosa Zameer presented the projected 2025 budget to Parliament on Thursday, announcing a budget deficit of MVR 9.4 billion, the lowest in recent years. This year's total budget stands at MVR 55 billion, which includes a supplementary budget of MVR 5.1 billion, increasing the current deficit to MVR 18 billion.

The upcoming budget is projected at MVR 56.6 billion, with anticipated expenditures of MVR 49.2 billion. Expected revenue and grants total MVR 39.8 billion, including MVR 2.5 billion in grants. The budget deficit of MVR 9.4 billion represents 7.9 percent of GDP, marking the lowest deficit relative to GDP since 2019.

Zameer attributed the financial situation to delayed cost-cutting measures, which increased state debt and necessitated systemic changes to ensure sustainable expenditure. The 2025 budget includes MVR 11.5 billion in fiscal reforms, aiming to cut spending by MVR 6.6 billion and generate an additional MVR 4.9 billion in revenue.

Key reforms will focus on the Aasandha health insurance scheme, subsidies, and state-owned enterprises. The government aims to prioritize targeted assistance for those most in need.

These reforms come amid pressures from international financial institutions, including the World Bank, for urgent spending reductions. The Maldives faces significant external debt obligations, with approximately USD 600 million due in 2025 and over USD 1 billion in 2026.

Despite these challenges, the Maldivian Administration reassured creditors of its commitment to honor debt obligations and announced plans to alleviate financial pressures, including reducing political appointees, implementing pay cuts, and raising taxes.