Government Revenue Climbs 10.2% as Spending Falls 8.6%

The Maldivian government's revenue and grants increased by 10.2 percent in the first quarter of the year, reaching USD 690 million by March 26. Concurrently, total government expenditure fell by 8.6 percent compared to the same period last year, according to the latest Weekly Fiscal Development Report from the Ministry of Finance and Planning. Tax revenue forms the overwhelming majority of state income, accounting for USD 560 million or 81 percent of the total. The Tourism Goods and Services Tax (TGST) saw the most significant growth, rising 23.9 percent to USD 210 million. Non-resident withholding tax also surged dramatically, increasing by 59 percent to USD 33.5 million. Non-tax revenue from resort land rentals grew by 14.7 percent to USD 21.6 million. On the expenditure side, total government spending stood at USD 540 million. The largest single expense was for salaries, allowances, and pensions, which totaled USD 210 million. Recurrent expenditure on subsidies increased by 8.8 percent to USD 57.8 million, bringing total aid and subsidies to USD 170 million. Despite the overall decline in spending, capital expenditure on development projects rose sharply. Investment in land reclamation and construction projects jumped 137.5 percent to USD 28.7 million, while more than USD 60.5 million was spent on Public Sector Investment Programme (PSIP) initiatives. The report notes that foreign exchange earnings have exceeded USD 300 million, indicating a strengthening economy. To bolster financial security, the government has deposited USD 33.8 million into the Sovereign Development Fund (SDF), including USD 6.2 million last week. The Ministry expects the government's fiscal position to continue improving, driven by higher revenue and ongoing efforts to control expenditure.