Budget for Social Housing Projects Reduced by Over MVR 700 Million for 2026
Hulhumale Phase 3 Hiyaa Towers. | Photo: MV+
The government has reduced the allocation for social housing projects in next year’s estimated budget by more than MVR 700 million compared to this year’s allocation of nearly MVR 1.8 billion.
According to the estimated budget handbook for 2025 published on the Ministry of Finance website, MVR 1.8 billion had been allocated for housing projects under the Public Sector Investment Programme (PSIP) this year. However, the revised figures in the estimated budget handbook for 2026 show that only MVR 392 million was ultimately dedicated towards social housing.
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The 2026 budget now allocates around MVR 1 billion for social housing projects. This represents a reduction of over MVR 700 million compared to this year’s allocation, despite President Mohamed Muizzu previously reiterating that the 2026 budget would be “housing-centered.”
In 2024, President Muizzu also announced that the 2025 budget would prioritise housing and home ownership. However, data from the Ministry of Finance show that actual spending on housing projects has been significantly lower than planned. By mid-October 2025, less than 10 per cent of the approved housing budget had been utilised. Of the MVR 1.8 billion allocated for PSIP housing projects this year, only MVR 164 million had been spent.
Despite significant funding earmarked for housing, no major social housing projects have been launched since President Muizzu assumed office in November 2023.
Earlier this year, the government launched the construction of 400 affordable housing units in Hulhumalé phase two under the Saudi Fund for Development (SFD). The project was inaugurated by Finance Minister Moosa Zameer and SFD’s CEO Sultan bin Abdulrahman Al-Marshad at a ceremony held in Hulhumalé phase two. Yet no progress has been made in the project, despite funding being allocated by the SFD.
Minister @MoosaZameer and H.E. Sultan bin Abdulrahman Al-Marshad, CEO of @SaudiFund_Dev, inaugurated the 400 Affordable Housing Units Project financed by SFD today. pic.twitter.com/95gEFT0PwU— Ministry of Finance and Planning (@MoFmv) April 14, 2025
The 2026 national budget, presented to Parliament by Finance Minister Moosa Zameer on Thursday, sets total expenditure at MVR 64.2 billion, with projected revenue of MVR 40.4 billion. Recurrent expenditure accounts for approximately 62 per cent of total spending, or MVR 39.9 billion, while capital expenditure—including funding for housing, infrastructure and development projects—is set at around MVR 9.3 billion.
The proposed budget projects a fiscal deficit of MVR 8.8 billion, equivalent to about 7.1 per cent of GDP, and forecasts that public debt will rise to MVR 158.8 billion, or 127.6 per cent of GDP.
