Source document
English translation, prepared by Good Morning Maldives (GMM), of the Dhivehi statement by Minister of Finance Hassan Zareer presenting the proposed 2027 State Budget (MVR 59,704,440,795) to the People's Majlis. Covers the 2026 fiscal review, the economic outlook, revenue measures, sector priorities and the fiscal targets for deficit and debt.
Numbered by Good Morning Maldives so coverage can cite a paragraph (¶) or a single sentence (L). Any sentence can be linked to on its own.
Bismillah ir-Rahman ir-Raheem.
All praise and thanks are due to Allah, Subhanahu wa Ta'ala, the Lord of all blessings. We pray for peace and blessings upon the noble Prophet of this Ummah, Muhammad, Sallallahu Alaihi wa Sallam, and we include in this prayer his family and his companions.
Honourable Abdul Raheem Abdulla, Speaker of the People's Majlis; Honourable Members of the People's Majlis,
Assalaamu Alaikum wa Rahmatullahi wa Barakatuhu.
I stand before this Honourable Majlis today to discharge a solemn statutory responsibility vested in me. With hope for a prosperous future for the Maldivian nation and its people, and with a firm resolve to build the nation on a sustainable economic foundation, it is with great pleasure that I have the honour today of presenting to this Honourable Majlis the proposed State Budget for the fiscal year 2027. This Budget is presented pursuant to Article 96(a) of the Constitution of the Republic of Maldives and Section 32 of the Public Finance Act.
Honourable Speaker, Honourable Members,
The budget I present to this Majlis today is the roadmap charted by the Government to raise the standard of living of every Maldivian citizen, and to build a just, fair and self-sufficient society in these Maldivian islands.
At the same time, every foundation of the 2027 Budget has been laid to realise the vision of His Excellency Dr Mohamed Muizzu, President of the Republic of Maldives, for the Maldives to attain developed-nation status by 2040.
Honourable Speaker, Honourable Members,
Before turning to the details of the 2027 budget, I consider it my duty to share with this Honourable Majlis a snapshot of the economic and financial realities the Maldives has passed through in the current year, 2026.
The current year, 2026, marks a historic juncture in the fiscal history of the Maldives: a year in which a record sum from the State Budget was applied to relieve the people of the considerable debt burden they have had to bear. As substantial obligations contracted under previous administrations fell due, this Government was fully prepared to meet them. It must also be noted that, so far this year, the Government has repaid MVR 10.4 billion in debt, ensuring debt sustainability and without the State incurring any new borrowing for this purpose. It is estimated that a total of MVR 11.7 billion will be spent on debt repayment by the end of this year. With these obligations settled, the Government's debt-service requirement for the coming year has been reduced. Accordingly, it is estimated that MVR 4.5 billion will be spent on debt repayment in 2027. This is an important step taken by the Government to reduce the debt burden on future generations.
The positive outcome of the Government's debt repayment measures has been the restoration of confidence among international financial institutions and an upgrade of the sovereign credit ratings assigned to the Maldives by rating agencies. This represents a significant fiscal achievement for the nation.
Honourable Speaker, Honourable Members,
With the economic growth achieved in 2025, a record number of tourists visited in December of that year. Tourist arrivals in January and February of this year were also above projections. However, at the end of the first quarter of this year, the global economy was severely disrupted by a major war. This constitutes the third major shock to the public finances of the Maldives within approximately the past decade.
This war disrupted trade and travel across the world. Oil prices on the world market rose to extreme levels. Air fares rose, and airlines began to reduce flights. This had a direct impact on tourism, the principal pillar of our economy. Tourists from European countries who travel to the Maldives through transit hubs in the Middle East were affected, which had an adverse impact on tourist arrivals. As a result, tourist arrivals in March and April fell by 23 percent compared with the same period in 2025. As of 27 October this year, tourist arrivals are 3.6 percent lower than in the same period last year.
Although it is no longer expected that tourist arrivals will reach the number projected for 2026, it is estimated that arrivals by the end of this year will come close to the total number of tourists who visited the Maldives in 2025.
Notwithstanding these effects, the economy has demonstrated strong resilience. I am pleased to inform this Honourable Majlis that, based on performance to date, State revenue is expected to meet the level projected for this year.
However, the greatest challenge during this period has been the sharp rise in State expenditure. Every change in world oil prices affects the cost of electricity generation, the transport of goods, and all the general costs of daily life. As oil and electricity prices have risen in other countries, many countries have been unable to supply electricity 24 hours a day, causing hardship for their people.
In the Maldives, however, daily life has remained unaffected and business activity has continued uninterrupted, as the Government has absorbed the impact of rising oil prices. Spending on the fuel subsidy, provided so that electricity reaches the people at an affordable price, has increased very significantly this year because of high world oil prices. Accordingly, it is expected that MVR 3.8 billion will be spent on the fuel subsidy by the end of this year. However, the oil price forecasts of financial institutions expect oil prices to fall next year. It is therefore expected that State spending on the fuel subsidy will fall to MVR 3.2 billion in 2027.
Honourable Speaker, Honourable Members,
Despite the difficulties of 2026, the Government has remained committed to strengthening the efficiency of the tax system and broadening the State's revenue base. In addition, work is under way to reduce dependence on oil, increase renewable energy generation, and improve the standard of services provided to the people. Work is also under way to make the Maldives a digitally advanced nation, to find a permanent solution to the housing shortage, and to raise the health and education sectors to a higher standard.
Honourable Speaker, Honourable Members,
Despite all these challenges and the global economic difficulties, one of the most notable achievements of this Government in 2026 is managing State expenditure within the limits of the approved budget, without going to a supplementary budget. With the blessing of Almighty Allah, we remain on course to achieve this objective.
In short, the current year, 2026, has been a year in which large debts were repaid and the people were protected from the financial and economic disruption of wars taking place in different parts of the world. I shall now turn to the details of the budget we have prepared for the coming year, 2027, built upon this foundation.
Fiscal policy for 2027 and for the medium term will be shaped after an in-depth study of the course of the Maldivian economy and the fiscal situation.
Looking at the global economy, international financial institutions forecast global economic growth of 3.4 percent next year. While the Maldivian economy grew by 6.3 percent in 2025, we had forecast growth of 5.3 percent for 2026. Because of the economic challenges faced this year, the country's growth has slowed sharply, and growth in 2026 is now forecast at between 0.6 (zero point six) percent and 1.8 percent. However, as conditions return to pre-war levels, the economy is projected to grow at a faster pace in 2027, between 3.9 percent and 6.8 percent. The inflation rate in the Maldives next year is expected to be 1.0 percent.
Honourable Speaker, Honourable Members,
By the end of the current year, 2026, it is now expected that 2.17 million tourists will have visited the Maldives, with bed-nights at 13.9 million. 2027 is an important year for tourism. Tourist arrivals that year are projected to rise to between 2.28 and 2.5 million, and bed-nights spent in the Maldives to increase to 14.5 million.
Official reserves are projected to stand at USD 817.7 million by the end of 2026, and at USD 907.2 million in 2027.
Honourable Speaker, Honourable Members,
The principal objective of the Budget proposed for 2027 is to lay the foundations of the policies that must be implemented for the Maldives to become a developed nation by 2040, while maintaining macroeconomic stability and ensuring fiscal and debt sustainability.
To achieve this objective, our work will be structured under the 'National Development Plan', which is being prepared with the vision of the Maldives becoming a developed nation by 2040 and which sets a clear direction for development. One of the most important foundations of this development plan is to create the fiscal space needed to invest in the progress of the people and to strengthen the economy, by bringing stability to the Maldivian economy and returning public finances to a sustainable path. To this end, we will ensure that State revenue grows sustainably, that the planning and implementation of State investments are strengthened, and that State resources are used responsibly and in the most beneficial way.
Honourable Speaker, Honourable Members,
To achieve the objectives I have outlined, I hereby present to this Honourable Majlis a proposed budget for 2027 totalling MVR 59,704,440,795 (fifty-nine billion, seven hundred and four million, four hundred and forty thousand, seven hundred and ninety-five rufiyaa). This represents a reduction of MVR 4.5 billion compared with the budget approved for 2026.
Of this amount, total State expenditure is projected at MVR 52.6 billion. This comprises MVR 42.7 billion in operating, or recurrent, expenditure, and MVR 9.9 billion in capital expenditure, which covers development projects and investments. Capital expenditure includes MVR 8.2 billion allocated to the Public Sector Investment Programme to carry forward development projects.
The budget projects that the State will receive MVR 43.2 billion in revenue and grants in 2027. This is MVR 1.4 billion more than in 2026. State revenue is projected to keep rising over the medium term, with MVR 46.6 billion expected in 2028 and MVR 49.7 billion in 2029. Furthermore, it has been decided that no tax levied by the State will be increased for the purpose of raising revenue in the coming year. Instead, work will be done to make the tax system more efficient, close existing loopholes, and increase compliance with tax laws and regulations. To this end, plans are in place to expand further the use of the Maldives Guest Information System introduced this year, and to introduce a modern e-invoicing system to strengthen the tax system in line with international best-practice standards. These measures will strengthen revenue administration and ensure that the tax revenue due to the State is collected in full.
In addition, to further strengthen the implementation of revenue policies and to speed up the work needed to increase compliance, this budget proposes transferring the fiscal mandate of the Maldives Customs Service to this Ministry, and amending the tax laws.
Honourable Speaker, Honourable Members,
Genuine development is not measured by economic growth alone; it must be reflected in the standard of living of every Maldivian citizen. The Government's vision for 2040 includes modern infrastructure and transport systems, modern health services and quality education, full social protection and equal opportunities, and, overall, a comprehensive system to raise the living standards of Maldivians. All of this progress will be achieved in an environment in which our national identity, unity, independence and sovereignty are fully protected.
Honourable Speaker, Honourable Members,
The tourism industry is unquestionably the principal engine of Maldivian economic growth. The Government's aim in 2027 is to increase tourist arrivals, grow tourism revenue, and spread its benefits to as many citizens as possible.
To achieve this, 2027 has been designated "Visit Maldives Year". While approximately 2.28 million tourists are forecast to visit the Maldives next year, plans are in place to bring more than 200,000 additional tourists through Visit Maldives Year activities, reaching a total target of 2.5 million.
This target can only be achieved through close collaboration between the Government and the tourism industry. To this end, work is under way with the Ministry of Tourism and Visit Maldives Corporation, together with airlines and tourism service providers, to strengthen the promotion of the Maldives, bring more tourists in the off-peak season, and increase flights.
Honourable Speaker, Honourable Members,
This Government has consistently prioritised building a healthy and resilient Maldivian society. To give families and friends the opportunity to spend time together and relax, the budget includes the development of a picnic island in every atoll of the Maldives.
To build national development and a sustainable future, priority must be given to preparing for climate change and diversifying the national economy. Accordingly, this budget gives high priority to projects such as the "Climate Adaptation Model Island Project", to prepare for climate change and ensure the environmental sustainability of islands.
Fisheries and agriculture are the two most important industries for ensuring the economic independence of the Maldives and the self-sufficiency of its people.
In the fisheries industry, projects to establish an additional 11,400 tonnes of storage will move forward during 2027. Plans are also in place to expand mariculture, and next year's budget includes increasing ice production capacity by an additional 550 tonnes per day. This includes ice plants set up specifically for reef fisheries. In addition, the new yellowfin tuna packing facility being established in Hulhumalé will widen the opportunity for small and medium-sized businesses to earn foreign currency directly.
To develop the agriculture sector, this budget gives special priority to further strengthening the work under way on "food security". At the same time, imports of produce that grow easily in Maldivian soil will be controlled through a strong system, to ensure that Maldivian farmers receive the fair price that their hard work deserves.
Honourable Speaker, Honourable Members,
One of the largest projects included in the 2025 budget was the completion and operationalisation of the new terminal at Velana International Airport. Its benefits to the economy have already begun to be felt. Today, one of the largest and highest-priority projects under way in the Malé region is the relocation of the Greater Malé commercial harbour to Thilafushi. Although successive administrations deliberated on modernising this port, the project had not previously advanced to implementation. However, under the resolute leadership and direct oversight of His Excellency President Dr Mohamed Muizzu, the project to relocate the commercial port to Thilafushi has now moved into practical implementation. The Government's target is to complete the project and make the port operational before 11 November next year. This project will transform port logistics in the Maldives. Compared with the 5 hectares of land at the Malé commercial harbour today, the Thilafushi port will be developed on a large area of 60 hectares. Compared with the 101-metre quay wall at Malé, the Thilafushi port will open with a 375-metre quay wall. When the project is fully complete, it will be an international-standard port with a quay wall of 1.4 kilometres.
In addition, instead of the 9.7-metre depth of Malé harbour, the container unloading area at Thilafushi will have a depth of 14.6 metres. This will allow large cargo vessels to berth directly at the port with ease. With this major investment, the annual capacity of 80,000 containers at the Malé port will rise to 390,000 (three hundred and ninety thousand) containers when the Thilafushi port opens. In future, operations can be expanded to clear 1.28 million containers a year. The long wait of 9 to 14 days now needed to unload vessels will be cut to less than 3 days. This will make it easier to transport goods to different parts of the Maldives, reduce the cost of importing goods, and create room for lower prices. Instead of Malé's narrow roads and cramped storage, the wide roads and larger, more spacious warehouses at Thilafushi will make unloading and storing goods easier, and traffic congestion on Malé's roads will fall. The area is to be developed with commercial areas set aside specifically for businesses. This will deliver substantial benefits to businesses and considerable convenience to the public.
One project the Government is prioritising so that the people gain the real benefit of this commercial port is completing the Greater Malé Connectivity Project, or the Thilamalé Bridge, by the end of next year. As this bridge connects Malé, Villimalé, Gulhifalhu and Thilafushi, economic activity across the entire region will be revitalised. Logistics will also advance greatly, and the transport of goods and business activity will increase manifold. The Government's target is to complete the bridge and begin using it by the end of 2027.
Honourable Speaker, Honourable Members,
As in the Malé region, it is the Government's aim to run economic projects in different parts of the Maldives. Apart from Malé, the most populous city in the Maldives is Addu City. The budget includes widening the Addu City Link Road, developing Addu's roads, and carrying out other major infrastructure projects. This will create new economic opportunities for Addu City. In addition, under the policy of dividing regions of the Maldives into zones and giving special relief to small and medium-sized businesses, the 2027 budget includes the funds needed for the "Addu SME Trade Facilitation Zone", designated as the first such zone. As a result, businesses operating in Addu will receive a range of concessions.
At the same time, to make Maldivian youth job creators instead of job seekers, this budget includes providing the funding needed by SME start-ups. This is a very important step to build a generation of self-reliant and productive young entrepreneurs.
Honourable Speaker, Honourable Members,
Small and medium-sized businesses are the backbone of our economy. Behind every small Maldivian business is a Maldivian with the intention of building a bright future and the determination to speed up the growth of the Maldivian economy. Therefore, to support small and medium-sized businesses, ease the burden they face in complying with tax requirements, help them grow, and widen their role in the economy, His Excellency the President has announced the decision to raise the annual revenue threshold for compulsory GST registration from MVR 1 million to MVR 1.5 million, effective from 1 January 2027.
Establishing strong principles for the best use of the Maldives' natural resources is something the Government is determined to achieve. With the law on uninhabited islands and lagoons coming into force this year, arrangements will be in place to develop these places sustainably and to ensure that their benefits reach the people fairly.
Honourable Speaker, Honourable Members,
I now turn to the digital transformation of the Maldivian State. The "Maldives 2.0" project, to speed up services to the people, eliminate corruption, and transform the running of government offices transparently with the help of technology, is a key vision of His Excellency President Dr Mohamed Muizzu. Under this vision, in addition to digitalising the services provided by individual sectors, this budget includes the establishment of a "National Sovereign Cloud Data Centre" to ensure the nation's digital security. A modern "Digital Identification System", or "Smart ID Card", will also be introduced to make it easier to access services.
Honourable Speaker, Honourable Members,
The Maldives Waterfront and Marina project is an important step towards the national aspiration of becoming a developed nation by 2040. This investment has the capacity to take Maldivian economic productivity to a new level. It will increase State revenue, diversify the economy, and bring major advances in renewable energy. It is an important project that will open new opportunities for Maldivian citizens and lay the foundation for a prosperous future for generations to come.
Honourable Speaker, Honourable Members,
One policy this Government has always considered important is to find strong and permanent solutions to the greatest social hardships faced by the people. The shortage of housing has long been the foremost concern of Maldivian citizens. To bring a permanent end to this shortage, housing projects in different regions of the Maldives will move forward rapidly under the direct oversight of His Excellency the President. MVR 3.0 billion has been included specifically for this in the 2027 budget. This project will bring a comprehensive solution to congestion in the Malé region.
It is a reality today that some citizens own their own land but lack the financial means to build a home on it. Accordingly, of the amount allocated for housing in next year's budget, MVR 750 million has been included to provide equity for a special loan scheme for first-time home buyers and those who wish to build. This will help make many families' dream of owning a home a reality. Next year's budget also includes speeding up work to provide basic water and sewerage services on vacant land in islands, to make it suitable for living.
Honourable Speaker, Honourable Members,
To teach the skills and knowledge needed to build a prosperous nation, it is essential to ensure that every child has access to quality education. To help achieve this, this budget provides for educational infrastructure projects in different islands of the Maldives. These include building classrooms and multipurpose halls, as well as setting up laboratories and the facilities needed for higher education.
We also believe that every child learns in a different way, and that every child must have the opportunity to reach their full potential. Accordingly, to strengthen school infrastructure and the inclusive education system, this budget includes providing and further strengthening the facilities needed by children with disabilities.
In addition, the 2027 budget includes MVR 136.3 million to continue the free degree programme next year, and more than MVR 651 million for loan facilities for students pursuing higher education.
Honourable Speaker, Honourable Members,
Ensuring quality health services is essential for the health of the people and the future of the nation. Accordingly, the 2027 budget includes MVR 10.2 billion for the health sector. In 2027, high priority will be given to establishing a system that can provide quality health services in every region of the Maldives.
To this end, and to strengthen the health care delivery system, it has been decided to establish next year a "Maldives Tertiary Hospitals Group", which will include tertiary-level hospitals and hospitals being developed to that level. This will give added strength to the work of raising the standard of treatment given to patients across the regions of the Maldives.
This budget also gives priority to establishing arrangements to procure the medical consumables and equipment that hospitals need through a central system. Another aim is to strengthen the procurement of medicines through "State Pharma", reducing costs and making essential medicines and consumables easier to obtain.
In addition, the budget gives priority to developing services already present in different regions of the Maldives, including decompression chambers, X-ray, CT scans, MRI, dental care, ear, nose and throat (ENT) services, gynaecology, and services related to childbirth and maternity. Much work will also be done to expand other specialised services.
Honourable Speaker, Honourable Members,
Social development and maintaining a sound religious and moral order are areas to which this Government always gives the highest importance. Providing equal opportunities in all aspects of life to every citizen of the Maldives is an important aim of the Government.
Accordingly, this budget includes the launch of a national project to build an inclusive society that empowers vulnerable populations in the Maldives. The main purpose of this project is to give persons with disabilities in our society the opportunity to obtain the services they most need, without any difficulty. To this end, the budget gives special priority to making roads, schools and health centres inclusive and accessible for them.
In addition, in line with the pledge of His Excellency the President, employment opportunities for persons with disabilities will be created through the Government and state-owned enterprises. This will give them the opportunity to gain social empowerment and achieve economic self-reliance.
At the same time, to establish equality in society, increase the priority given to gender equality in implementing policies, and monitor this, a Gender Equality and Social Inclusion, or "GESI", budget will be prepared next year, in a way that allows spending on these areas to be identified.
In addition, as part of our social protection policies, this budget gives special priority to the rehabilitation of young people affected by the grave epidemic of narcotics. Accordingly, the budget includes establishing modern rehabilitation centres in three more regions of the Maldives. These centres will provide very significant help in bringing young people who have fallen victim to drugs back into education, employment and family life.
Honourable Speaker, Honourable Members,
The strongest pillar of this nation is our noble religion of Islam. Therefore, this Government always gives the highest priority to maintaining a sound religious and moral order and to promoting religious awareness.
To mark the historic occasion of 900 years, in the Hijri calendar, since the Maldives embraced Islam, the establishment in Hulhumalé of the "Sultan Muhammad bin Abdullah Grand Mosque", the largest mosque to be built in the Maldives, is a priority project of the Government. It is a historic building, spacious enough for 10,000 people to pray at one time, that will reflect the religious traditions of the Maldives.
In addition to such historic work, this budget gives priority to arrangements that make religious facilities easily available to the people. Accordingly, projects to establish waqf buildings¹ and branches of the Qur'an Centre in different islands will move forward. There is no doubt that these will make it easier for Maldivian children to receive Islamic education and will strengthen the religious spirit.
Honourable Speaker, Honourable Members,
It is the Government's aim to give every citizen of the Maldives the opportunity to live a healthy life in full health. To achieve this, the budget includes establishing and operationalising fitness and recreation centres in every region of the Maldives, so that people can take part in different forms of exercise and sport and spend relaxing time with family and friends.
In addition, the Government gives great priority to building a love of sport among young people and children, expanding sporting activity at island level, and developing athletes in this field. To achieve this, next year's budget also includes work to establish outdoor gyms and sports complexes on every island of the Maldives.
Honourable Speaker, Honourable Members,
Nurturing a generation that respects the community around it, holds a deep love for the nation, and stands firm in its moral character is the most important foundation that can be laid for the nation's future. To build such a generation, imbued with patriotism and a sense of national duty, this budget gives special priority to expanding the Patriotic Service Programme (Wathanee Khidhmai) to a wider reach than before.
At the same time, this budget provides for implementing, across all parts of the Maldives, the National Project for Mutual Respect and National Unity², one of the presidential pledges of His Excellency President Dr Mohamed Muizzu. The special priority His Excellency accords to reviving and upholding the enduring values of the Maldivian people, and the noble traditions of mutual respect that have long bound Maldivians together as one nation, is of genuine value and of great benefit to society.
Honourable Speaker, Honourable Members,
Creating an easy living environment in the Malé region and strengthening public services is a priority of this Government. In particular, to solve the problems faced by residents of the Greater Malé region, the "Greater Malé Transport Mobility Plan" will be implemented next year. The aim of this plan is to reduce congestion and create an environment in which people living in the Malé region can live in comfort. In addition, to manage Malé's traffic system to a modern standard, next year's budget includes establishing a "Smart Traffic Enforcement System" that uses artificial intelligence to digitalise traffic management and make it more effective than it is today.
At the same time, maintaining the peace and security of the nation is one of the most important responsibilities of any government. To fulfil this responsibility, this budget includes increasing the human resources needed for the police centres being built in the regions to maintain the peace and security of islands, so that they can provide quality services.
Honourable Speaker, Honourable Members,
Protecting the environment and sustainable development are the most important responsibilities we must fulfil for the future generations of the Maldives. With the many challenges of climate change and natural disasters the world now faces, the Maldives is one of the countries most adversely affected by climate change. Therefore, reducing dependence on oil and moving to renewable energy cannot be deferred.
To reach this goal, one of the key pledges of His Excellency the President is that 33 percent of the energy generated in the Maldives will come from renewable energy by 2028. The most important project decided for next year to bring about this change is the "Maldives Solar Development and Energy Storage Solutions Project". Under this solar energy project, which will proceed on a power purchase agreement (PPA) basis, a total of 250 megawatts of renewable energy will be generated, and modern energy storage systems will be established. This project is expected to reduce the amount of fuel purchased by more than 100 million litres a year. It will also reduce dependence on oil, lowering spending on fuel purchases and Government spending on the fuel subsidy. One aim of investing in renewable energy is to make the nation's economic growth resilient against global economic shocks and the adverse effects of environmental threats.
At the same time, among the work to protect the environment, further expanding through this budget the 5 million tree-planting programme already under way is another important task decided for next year.
Honourable Speaker, Honourable Members,
Looking at the capital expenditure in this budget, the highest priority has been given to infrastructure development that addresses the priority needs of communities across the country. Accordingly, MVR 8.2 billion has been allocated under the PSIP for development projects to be carried out in different parts of the Maldives alone. The aim of next year's budget is to complete 70 percent of the projects already started.
This is a budget that maintains the fiscal capacity of the State, does not affect services to the people, carries forward the nation's development, and ensures that results are delivered.
Honourable Speaker, Honourable Members,
While carrying forward development projects, it is the Government's responsibility to ensure that the nation's fiscal stability is maintained. The most important part of this budget is the set of targets established to ensure the fiscal sustainability of the State.
Accordingly, one target of next year's budget is to keep State revenue at no less than 32 percent of GDP. At the same time, covering the State's recurrent expenditure from the revenue received is another target of next year's budget. As I noted earlier, revenue of MVR 43.2 billion is forecast for 2027, while recurrent expenditure is projected at MVR 42.7 billion.
Direct government debt is projected at 117 percent of GDP in 2027. This figure is forecast to fall to 116.3 percent in 2028, and the budget also sets a target of reducing debt to 107.9 percent by 2029.
For development projects, next year's budget sets a target that, in determining total PSIP expenditure, the share funded from the domestic budget will not exceed 70 percent. At the same time, next year's budget also sets a target of keeping interest expenditure on loans from external parties at 12 percent of total State revenue.
The main purpose of all this work is to reduce the State's overall balance deficit to 5 percent of GDP by the end of 2028. At the same time, PSIP expenditure is also projected to fall to 7 percent of GDP in 2028.
Honourable Speaker, Honourable Members,
By the end of the current year, 2026, the overall deficit of the State budget is forecast at MVR 7.6 billion. This is 6.2 percent of GDP. The budget deficit for 2027 is projected to rise to MVR 9.4 billion, which is 7.3 percent of GDP. With these deficit figures, the primary balance is projected at 2.5 percent of GDP in 2026 and 3.4 percent in 2027.
Honourable Speaker, Honourable Members,
Although changes on the international stage have brought major shocks to the State budget, the budget deficit for the current year, 2026, is expected to be held at the level approved. One of the main reasons for this is the strong controls now applied in implementing the State budget. The controls now applied in budget implementation will be maintained next year as well.
Honourable Speaker, Honourable Members,
The 2027 budget I have presented today to this Honourable Majlis lays a foundation for the Maldives to reach the status of a developed nation by 2040. This budget has been prepared to make the national vision a reality, by giving priority to economic stability, to ensuring the fiscal and debt sustainability of the State, and to investments that will bring positive change to the lives of the people.
Reaching this goal requires sustained effort and comprehensive decisions. The measures in this budget will strengthen the economic foundation of the Maldives, expand public services, and increase opportunities for citizens living on every island of the Maldives. The progress we achieve today must pave the way to build a prosperous and resilient Maldives for the generations to come.
I therefore respectfully request this Honourable Majlis to approve this Budget as presented, and to support the measures needed to achieve its objectives. I extend my sincere gratitude to this Honourable Majlis for its continued support to the Government in the development of the nation.
May Almighty Allah bless our work, and may He make 2027 a happy and prosperous year in which the Maldivian economy grows, the State's finances are strengthened, and the living standards of the people are raised. May He also grant us success in achieving the development vision set for 2040. Ameen.
Translation by GMM from the Dhivehi original. Check any quotation against the original Dhivehi text. Section headings in square brackets were inserted by the translator. The statement gives debt as direct government debt (117% of GDP in 2027); the Ministry's brief gives debt including government-guaranteed debt (124.5%). The statement compares the 2027 budget with the budget 'approved for 2026'; the brief compares it with the 2026 'Revised' column. The statement gives the primary balance as unsigned percentages; the brief prints it as a deficit (negative). The translated text is set out in full in this entry under Full text, numbered by paragraph (¶) and sentence (L); there is no PDF of the translation itself, and the Dhivehi original should be attached or linked when an editor has it. The superscript markers in ¶85 (waqf buildings) and ¶91 (National Unity) have no footnote text yet.
In GMM's reading, Budget 2027 is the first hard pivot away from a fiduciary abyss of borrowing more to meet old debts. Minister of Finance Hassan Zareer presented its MVR 59.7 billion as the foundation of President Muizzu's 2040 vision; the deficit is set to narrow to 2.6% of GDP by 2029.
By Fathimath Saairaa
