Government Budget 2023

A government budget is an annual financial statement that outlines the estimated government expenditure and expected government receipts or revenues for the forthcoming fiscal year, which may or may not correspond with the current calendar year. In the Maldives, the Ministry of Finance is the government authority to set and forecast the budget for the forthcoming fiscal year.

The Finance Ministry has proposed a total of MVR 42.8 billion as the state budget for the year 2023. The 2023 budgeted MVR 40.7 billion as expenditure for the year while the estimated revenue is at 32.1 billion leaving a budget deficit of MVR 8.6 billion compared to a deficit of MVR 9.82 billion in 2022.

Revenue

Billion Rufiyaa 32.1 Expenditure Billion Rufiyaa 40.7 Deficit Billion Rufiyaa 8.6

The 2023 budget will mainly focus on recurrent expenditures which account for MVR 28.6 billion of the budget. While MVR 5.65 billion has been set for other capital expenditure, MVR 8.43 billion has been allocated for PSIP. Hence, with 20.7% of the total budget being allocated for PSIP, the budget complements the aims of the government to accomplish various development programs in the Maldives.

Revenue And Expenditure

It is estimated that the government would receive MVR 32.1 billion as revenue and grants in 2023, of which tax revenue constitutes the major item. Government revenue is classified under three main headings – tax revenue, nontax revenue and grants.

The estimated budget for 2023 is MVR 42.8 billion, of which total expenditure is 40.7 billion. Total expenditure is calculated by deducting loan repayments and contributions to international financial institutions.

Government expenditure is made up of two main components; recurrent expenditure (expenditure incurred for the day-to-day running of the government and providing public services) and capital expenditure (expenditure on infrastructure projects and capital items such as machinery).

The estimated budget balance for 2023 is a deficit of MVR 8.6 billion. This deficit is financed through various financial instruments such as Bonds, Sukuk, Treasury Bills and other means of borrowings.

The overall budget balance is the difference between total revenues and grants, and expenditures. There will be a budget deficit if the total expenditures are higher than the total revenues and grants. The primary budget balance is the overall balance after deducting loan servicing costs.

Budget Details

Economic Affairs

According to the Ministry of Finance, the biggest portion of the budget for 2023 is allocated for economic affairs. The 2023 Budget includes a total of MVR 10,525 million on economic affairs. Most of the expenditure in this sector (MVR 4.9 billion) is allocated for general economic, commercial & labor affairs while MVR 2.9 billion is allocated for transport. The remaining budget is distributed among agriculture, fuel & energy, mining, manufacture & construction, communication and other industries.

10,525

Billion Rufiyaa

Billion Rufiyaa

4,648

8,535 Billion Rufiyaa

GENERAL PUBLIC SERVICES AND RECREATION, CULTURE AND RELIGION EDUCATION

The second-highest amount in the 2023 budget is allocated for General Public Services and Recreation, Culture and Religion with a total of MVR 8,535 million. The 2023 budget allocates MVR 2,039 million on the provision of general public services while a total of MVR 1,816 million is allocated for executive and legislative organs, financial and fiscal affairs, and external affairs and MVR 195 million on general public services. Moreover, MVR 958 million is allocated for recreation, culture, and religion whereas MVR 431 million is allocated for recreation and sporting services and MVR 370 million for religious and other community services.

The education sector is one of the key areas the government is focused on in its budget for 2023. Therefore, it has allocated MVR 4,648 million for the education sector. Among that, MVR 857 million is allocated for tertiary education while MVR 3,791 million is allocated for other levels of education.

The 2023 budget includes a total of MVR 5,043 million for the provision and expansion of healthcare services. From this budget, MVR 2,469 million is allocated for employee remuneration and related costs in the health sector while MVR 995 million is allocated for medical consumables and supplies. Moreover, the remaining budget will be utilized for other general hospital services.

Health Social Protection

Expenditures on this function aim to promote equality within the society. From the budget allocated for this sector, MVR 1,600 million is allocated for sickness and disability allowances, MVR 1,600 million for pension of elderly, and MVR 716 million for family & children and other expenditure for social protection. The 2023 Budget has allocated a total of MVR 3,916 million for this sector.