Government revenue continued to expand during the first six and a half months of 2026, supported by stronger tax collections, tourism-related income and increased grants, while higher public expenditure and substantial loan repayments contributed to an overall fiscal deficit of MVR 1.54 billion as of 16 July.
Cumulative government expenditure reached MVR 24.52 billion during the period, representing an increase of MVR 4.25 billion, or 21 percent, compared with the corresponding period of 2025. Revenue and grants increased by nine percent to MVR 22.98 billion, reflecting continued economic activity and improved collections across several major tax categories.
The fiscal position shifted from an overall surplus of MVR 817.3 million recorded at the same point in 2025 to a deficit of MVR 1.54 billion in 2026. This represents a year-on-year change of approximately MVR 2.35 billion, as expenditure increased at more than twice the rate of revenue growth during the reporting period.
Recurrent expenditure rose by 20.8 percent to MVR 21.36 billion and accounted for approximately 87 percent of total government spending. Administrative and operational expenditure increased to MVR 13.28 billion, partly reflecting higher allocations for grants, contributions and subsidies intended to support public services, households and key sectors of the national economy.
Subsidy expenditure increased from MVR 1.68 billion during the corresponding period of 2025 to MVR 3.13 billion in 2026, representing growth of 86.3 percent. Government spending on salaries, wages and pensions also rose by 10.8 percent to MVR 8.01 billion, reflecting the continued financing of public-sector services and obligations.
Capital expenditure increased by 22.1 percent to MVR 3.15 billion, demonstrating continued investment in national development and public infrastructure. Expenditure under the Public Sector Investment Programme stood at MVR 3.16 billion, a decrease of 16 percent compared with the same period last year, largely due to comparatively lower spending on transport infrastructure and environmental projects during the reporting period.
Revenue performance was supported primarily by tax collections, which increased by 11.3 percent to MVR 17.62 billion. Goods and Services Tax remained the largest source of tax revenue, generating MVR 9.67 billion, of which MVR 6.68 billion was collected through Tourism Goods and Services Tax.
The strong contribution from Tourism Goods and Services Tax reflects the continued importance of the Maldives’ tourism industry to national revenue. The country’s internationally recognised resort sector, supported by its premium island destinations, high-quality hospitality services and globally competitive tourism offerings, continues to play a central role in generating foreign exchange, supporting employment and contributing to government income.
Maldivian resorts remain a key pillar of the economy, attracting travellers from major international markets through distinctive island experiences, luxury accommodation, marine activities, family-oriented services, wellness facilities and environmentally conscious tourism initiatives. Revenue generated from the resort industry supports wider national development by contributing to public services, infrastructure investment, social programmes and economic diversification.
Business and property tax collections increased by 22 percent to MVR 3.67 billion, while revenue from import duties rose by 11.2 percent to MVR 1.81 billion. These increases indicate continued commercial activity and stronger contributions from businesses and imported goods during the first six and a half months of the year.
Non-tax revenue declined by 2.9 percent to MVR 4.92 billion, mainly due to lower collections from government fees and charges. However, grants received by the Government more than doubled compared with the corresponding period of 2025, reaching MVR 438.8 million.
The primary balance, which excludes financing transactions and interest costs, remained positive at MVR 1.22 billion. Although this was 65.2 percent lower than the MVR 3.51 billion primary surplus recorded during the same period last year, the continued primary surplus indicates that government revenue remained higher than non-interest expenditure.
Government loan repayments reached MVR 9.29 billion by 16 July 2026, nearly three times the MVR 3.28 billion repaid during the corresponding period of 2025. The substantial increase reflects the Government’s continued attention to meeting debt obligations and managing scheduled repayments.
Loan repayments are reported separately and are not included within the expenditure figure used to calculate the overall fiscal balance. The Ministry of Finance and Public Enterprises also clarified that expenditure figures represent transactions recorded in government accounts, some of which may not yet have been settled through cash payments.
The Ministry further noted that the published revenue and expenditure figures remain subject to revision as accounting reconciliation and verification processes continue. The latest fiscal figures highlight strong growth in tax revenue, the continued contribution of the tourism and business sectors, increased development expenditure and the Government’s ongoing efforts to meet its financial commitments while maintaining essential public services.
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