Adhadhu understands that the government is proposing a record budget of MVR 64 billion for 2026.
The finance ministry expects revenue of MVR 43 billion and expenditure of MVR 57 billion next year. This means MVR 14 billion must be raised to cover the deficit.
This is the largest budget in the country's history. The main reason for the record budget is the huge loans due in 2026.
More than USD 1 billion is expected to be spent on loan repayment next year, including USD 500 million on sukuk and USD 100 million on other bonds.
Meanwhile, the government did not act in line with the approved budget for the current year.
The government said MVR 8 billion would be saved through cost-cutting measures. But the majority of these measures have not been implemented.
The government also changed its policy by stopping targeted subsidies and refusing to address issues in the pension system.
Despite the non-implementation of cost-cutting measures, the government has maintained a budget surplus for 40 consecutive weeks.
According to the finance ministry, this was achieved due to the government's fiscal discipline.
However, the government actually achieved this surplus by keeping the bulk of the capital budget unspent.
Most of the projects have been handed over to state companies to be funded through their budget.
