The Finance Ministry noted that the significant increase in the amount of money deposited in the SDF is an indication of the accelerated strengthening of the government's reserves through the financial system.
Ministry of Finance
According to the Weekly Fiscal Developments Report, the overall deficit has declined by MVR 9.6 billion compared to 2024 due to increased revenue and decreased total expenditure. This is a decrease of 73.5 percent compared to the previous year.
Total revenue increased with the increment of tourism revenue
As of December 2025, the total revenue and grants received by the government reached MVR 39.6 billion. This represents a 12.9 per cent increase compared to MVR 35.1 billion in the same period in 2024.
The estimated revenue and grants for 2025 are MVR 39.8 billion. When the 2025 budget was presented, free aid was expected to be Rs 2.6 billion, but by the end of the year, it had decreased to MVR 415.2 million.
Although grant revenue fell below estimates, tax and non-tax revenue exceeded budget estimates by 5.5 percent or MVR 2.0 billion. Tax revenue stood at MVR 29.2 billion, up 10.6 per cent from MVR 26.4 billion in the previous year. Of this, Rs 11.0 billion was collected from the tourism sector's value-added tax (TGST). This is an increase of 15.2 per cent compared to MVR 9.5 billion in the previous year. Non-tax income increased to MVR 10.0 billion, an increase of 24.0% compared to MVR 8.1 billion in the previous year. It is an increase of MVR 2.0 billion over the approved amount.
While recurrent expenditure is under control, total expenditures are down
As of December 2025, total government expenditure stood at MVR 43.1 billion. This is a decrease of 10.6 per cent compared to the previous year. MVR 48.2 billion in Recurrent expenditures have increased to MVR 36.3 billion due to policies such as the implementation of salary equalisation by the administration. This is an increase of 4.1 per cent compared to MVR 34.9 billion in the previous year. The main reason for this increase is the increase in employee expenses due to the change in salaries.
In 2025, capital expenditure stood at MVR 6.8 billion. This is a decrease of 48.8 per cent compared to MVR 13.3 billion in the previous year. The report noted that capital expenditure increased over the past week due to expenditure on roads, bridges and airport development projects. This shows the government's priority for infrastructure development projects while keeping total expenditure at a certain level.
The state’s fiscal position is in good shape and the primary balance is in surplus
By 2024, the overall budget deficit was at MVR 13.1 billion. By 2025, this figure has been reduced to MVR 3.5 billion. This is the positive result of the change in revenue policies, along with controlling public expenditure.
The primary balance (the gap between revenue and expenditure, excluding interest cost on debt), a key measure by which investors assess the state’s fiscal sustainability, has improved significantly. The primary balance, which stood at a deficit of MVR 8.4 billion in 2024, stood at a surplus of MVR 1.2 billion at the end of This is the first time in recent history that a fiscal year has ended in a primary surplus.
Increase deposits to the Sovereign Development Fund and strengthened reserves
One of the most important factors for international financial institutions and investors is the pace of reserves built to ensure the country's financial security. The Sovereign Development Fund (SDF) deposits in 2025 reached MVR 2.7 billion. This is an increase of 91.2 per cent compared to MVR 1.4 billion in the previous year. This increase in fund deposits will increase the ability of the government to pay its debt and reduce pressures on official reserves.
According to the data available as of December 2025, tourism tax revenue has increased significantly. According to government estimates, 2.2 million tourists will visit the country in 2025 and foreign exchange earnings reached USD1.2 billion.
The significant increase in the amount of money deposited in the SDF is an indication of the accelerated strengthening of the government's reserves through the financial system. This is an important step to maintain the stability of a small and open economy like the Maldives, which is vulnerable to various external shocks.
