Maldives government has spent a supplement of MVR 367 million on subsidies after the budgeted total for 2023 was fully exhausted.
According to the Ministry of Finance, the state has surpassed the budgeted amount by MVR 280 million for Aasandha health insurance scheme. Moreover, an additional MVR 88 million has been expended beyond the budgeted total on other subsidies.
Maldives government allocated MVR 5.6 billion for subsidies and council grants so far in 2023.
Despite a budgeted total of MVR 1.8 billion for council grants for 2023 fiscal year, state has already spent MVR 1.1 billion.
State expenditure on subsidies exceeded the budgeted total in 2022 as well, which rose due to the additional expenditure on fuel. Government allocated MVR 2.3 billion for oil expenditure, constituting a portion of the total MVR 8.4 billion designated for subsidies.
Despite the surge in state revenues, the rise in expenditure presents a challenge for the government in maintaining its fiscal balance. The primary factor contributing to the budget deficits in recent times is the substantial rise in the expense of subsidies.
Meanwhile, International Monetary Fund (IMF) and the World Bank recommended the Maldives government to enhance its management of subsidy-related expenditures.