Gov’t Reports Sharp Year-On-Year Decline In Subsidy Expenditure

Financial statistics show that state spending on subsidies has declined by more than MVR 650 million year on year.

According to weekly fiscal development reports from the Ministry of Finance, MVR 2.5 billion was spent on subsidies by 7 August last year. This year, the figure for the same period has fallen to MVR 1.8 billion.

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The 2025 State Budget allocated MVR 1.86 billion for subsidies, with the government initially planning to introduce a targeted subsidy system as part of its Economic Reform Agenda. However, the initiative was abandoned in May following an announcement by President Dr Mohamed Muizzu.

The Finance Ministry’s weekly report also indicates a decline in total recurrent expenditure compared with last year. As of last Thursday, recurrent expenditure stood at MVR 22.3 billion, down from MVR 26.8 billion in the corresponding period last year.

Despite this overall decrease, spending on salaries and pensions has risen. Expenditure in this category amounted to MVR 7.9 billion last year, while this year’s figure has already reached MVR 8.4 billion.

The government’s budget remains in surplus, attributed to reduced operational costs and higher revenues. Total revenue includes MVR 23.7 million in free aid, while total expenditure, inclusive of debt repayments, stands at MVR 22.3 billion. The overall budget balance currently shows a surplus of MVR 1.4 billion.