Finance Minister Zeer presents MVR 59.7 billion budget for 2027, targets fiscal sustainability

Finance Minister Hassan Zeer presented the proposed state budget of MVR 59.7 billion for next year to the People's Majlis today, describing it as a budget that will ensure fiscal sustainability, improve services to citizens, and secure results for national development. Minister Zeer stated that the highest priority for capital expenditure in the budget is infrastructure development aligned with public expectations. The budget allocates MVR 8.2 billion to development projects under the PSIP, with a target of completing 70% of ongoing projects. Zeer noted that the total PSIP expenditure funded from the domestic budget will be limited to no more than 70%, and the interest cost of foreign loans will be kept within 12% of total income. He outlined key fiscal targets: state revenue should remain at least 32% of GDP, recurrent expenses should be covered by available revenue, and the overall balance deficit of the state should be reduced to 5% of GDP by the end of 2028. According to the minister, the state's direct debt next year is estimated at 117% of GDP, expected to decline to 116.3% in 2028 and further to 107.9% by 2029. PSIP expenditure is projected to drop to 7% of GDP by 2028. Zeer stated that the overall budget deficit for the current year is expected at MVR 7.6 billion (6.2% of GDP), while the 2027 budget deficit is projected at MVR 9.4 billion (7.3% of GDP). He said the primary balance as a percentage of GDP is estimated at 2.5% in 2026 and 3.4% in 2027. The Finance Minister attributed the ability to keep the current year's deficit within approved levels to strict controls in budget execution, which will continue next year.