Finance Minister Reports MVR 2.5 Billion Saved Through Gov’t Cost-Reduction Measures

Finance Minister Dr. Mohamed Shafeeg has announced that MVR 2.5 billion has been saved this year due to the government’s cost-reduction initiatives.

Speaking at a meeting of the Parliament’s Public Accounts Committee, Dr. Shafeeg highlighted the early positive results of the fiscal reforms and cost-saving measures implemented by the government.

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Despite the significant savings, Dr. Shafeeg emphasised the necessity of further fiscal reforms to achieve the government’s project goals. He pointed out ongoing financial inefficiencies within some government sectors and stressed the need for better management of state-owned companies.

While an MVR 49.8 billion budget has been approved for this year, Dr. Shafeeg warned of future financial challenges if additional reforms are not undertaken. He noted that although the government planned to implement these reforms by mid-year, immediate action was required due to current budgetary constraints.

Dr. Shafeeg reported that the government has been saving MVR 17 million per month as a result of these reforms. He also mentioned new reforms in the health sector that are expected to yield substantial savings.

Referring to President Dr. Mohamed Muizzu’s policy on cost reduction, revenue growth, and a medium-term revenue strategy, Dr. Shafeeg said efforts are underway to establish a timeline for implementing these measures.

The Finance Ministry had earlier warned that the budget deficit, initially listed at MVR 14 billion, could rise to MVR 20 billion without fiscal reforms. In response, significant cost-reduction steps were announced in February, targeting expenditure cuts in seven key areas, including staff promotions, official trips, and new allowances.

Parliament began investigating state finances after concerns were raised by Deputy Speaker Ahmed Nazim. Dr. Shafeeg was initially summoned to a Public Accounts Committee meeting on Monday but was unable to attend due to health issues.