Some 93 percent of a supplementary budget proposed by the government to increase this year's budget is to be financed with debt, details made public by the Finance Ministry have revealed.
A supplementary budget of MVR 6.5 billion was submitted to parliament to add funds to the MVR 42.8 billion budget approved for the year. If the additional spending is approved by parliament, this year's total budget will grow to MVR 49.3 billion.
Finance Ministry estimates for the supplementary budget show that MVR 6.1 billion of the additional funds is to be secured through loans:
- Loans from foreign parties - MVR 1.1 billion
- Budget support loan - MVR 3 billion
- Domestic securities and loans from Maldivian parties - MVR 1.9 billion
Additional funding for managing the budget was required as revenue has not grown despite increased expenditure.
The budget approved for this year projected MVR 32 billion as annual revenue. The supplementary budget revised estimates of income with an additional MVR 399 million. The Finance Ministry now expects revenue to reach MVR 32.4 billion this year.
With the supplementary budget, the Finance Ministry estimated that deficit financing will reach MVR 17 billion, including MVR 3.4 billion spent on debt repayment.
The supplementary budget would mainly increase spending on the Public Sector Investment Progam (PSIP), Aasandha, subsidies and capital contributions to state-owned enterprises, the Finance Ministry said in a statement.
