The Maldives recorded continued growth in government revenue during the first seven and a half months of 2026, with revenue and grants reaching MVR 27.61 billion by 20 August, supported by stronger tax collections, tourism-related receipts and increased business and property tax revenue.
Figures published by the Ministry of Finance and Public Enterprises show that total government revenue and grants increased by MVR 2.61 billion, or 10.4 percent, compared with MVR 25 billion during the corresponding period of 2025. Government recurrent and capital expenditure stood at MVR 28.74 billion during the period, compared with MVR 24.09 billion a year earlier.
The resulting fiscal balance was a deficit of MVR 1.13 billion, compared with a surplus of MVR 910.9 million recorded by the same point in 2025. The change reflects a period in which expenditure increased at a faster rate than revenue, with spending rising by MVR 4.65 billion, or 19.3 percent, year-on-year.
Despite the overall deficit, the Government maintained a primary surplus of MVR 2.21 billion before financing and interest costs were taken into account. This indicates that government revenue remained sufficient to cover recurrent and capital expenditure excluding financing and interest obligations. The primary surplus was lower than the MVR 3.97 billion recorded during the comparable period last year.
Tax revenue continued to provide the strongest foundation for state income, accounting for close to 78 percent of total revenue and grants. Tax collections reached MVR 21.48 billion by 20 August, representing growth of 12.1 percent from MVR 19.16 billion during the corresponding period of 2025.
Goods and Services Tax remained the Government’s largest individual source of revenue, generating MVR 10.92 billion. Tourism Goods and Services Tax contributed MVR 7.39 billion, while general GST generated MVR 3.53 billion.
The strong contribution from Tourism Goods and Services Tax reflects the continued importance of the tourism industry to the Maldives’ public finances and wider economy. The country’s resort sector remains a major contributor to government revenue through tourism taxation, resort rent, land-related payments and other fees associated with the operation and development of tourism properties.
The Maldives’ resort industry has continued to provide a significant revenue base for the state while supporting employment, foreign exchange earnings, investment and economic activity across numerous interconnected sectors. Government income generated directly and indirectly through resorts therefore remains central to the country’s fiscal position, particularly as the administration works to strengthen revenue mobilisation while maintaining public services and meeting national development commitments.
Business and property tax collections also recorded strong performance, increasing by 20.5 percent to MVR 5.55 billion. Import duties rose from MVR 1.87 billion during the corresponding period last year to MVR 2.19 billion this year, further contributing to the expansion in tax revenue.
Non-tax revenue reached MVR 5.67 billion, representing year-on-year growth of 0.9 percent. Fees and charges declined by 11 percent to MVR 2.3 billion, although the reduction was partly offset by increases in revenue from government property, resort rent and land-related payments.
On the expenditure side, recurrent spending accounted for the majority of government expenditure as the administration continued to finance public services, employee costs, pensions, subsidies, grants and other operational obligations. Recurrent expenditure increased by 20.8 percent to nearly MVR 25 billion and represented approximately 87 percent of total recurrent and capital expenditure during the period.
Capital expenditure amounted to MVR 3.75 billion, representing around 13 percent of total expenditure. The figures demonstrate that a substantial proportion of government resources during the period continued to be directed towards maintaining public services and meeting recurring national obligations.
Expenditure on salaries, wages and pensions increased by 11.1 percent to MVR 9.39 billion. Administrative and operational expenditure rose by 27 percent to MVR 15.54 billion.
Within administrative and operational spending, grants, contributions and subsidies reached MVR 8.47 billion, representing an increase of 43 percent compared with the corresponding period of 2025. Direct subsidy expenditure increased by 76.3 percent, rising from MVR 2.01 billion last year to MVR 3.54 billion this year.
The increase indicates the significant resources being directed towards financial assistance, subsidies, public services and other government obligations during the year. Such expenditure forms an important part of the Government’s efforts to maintain essential services and provide support across different areas of the economy and society, although the higher recurrent spending has also contributed to the wider increase in overall expenditure.
Public Sector Investment Programme expenditure stood at MVR 3.77 billion, down 29.1 percent from MVR 5.32 billion during the corresponding period last year. Transport infrastructure remained the largest area of development spending, receiving MVR 1.33 billion, compared with MVR 3.66 billion by the same date in 2025.
Development expenditure increased in several other priority areas, including land management, public housing, water and sanitation, and education. These allocations reflect continued investment across important social and economic sectors, although the increases were not sufficient to offset the reduction in transport infrastructure expenditure.
Financing and interest costs amounted to MVR 3.34 billion during the period. After these obligations were accounted for, the MVR 2.21 billion primary surplus translated into the overall fiscal deficit of MVR 1.13 billion.
Government loan principal repayments, which are accounted for separately from expenditure when calculating the fiscal deficit, reached MVR 9.72 billion during the period. This was more than twice the MVR 3.94 billion repaid by the corresponding date in 2025.
The higher repayment figure demonstrates the scale of debt obligations being managed by the Government during 2026. Although repayments of borrowed principal are not classified as expenditure for fiscal deficit calculations, they remain an important consideration for government cash management because funds must be generated through revenue, refinancing or additional financing arrangements to meet these obligations.
Outstanding government securities stood at MVR 99.01 billion as of 10 August. Government securities include borrowing instruments such as Treasury bills and bonds issued by the state. The amount represents borrowing raised through these instruments rather than the Maldives’ entire public debt stock.
The 2026 national budget projects total revenue and grants of MVR 40.37 billion against expenditure of MVR 49.21 billion, resulting in a projected full-year deficit of MVR 8.84 billion.
By 20 August, the Government had already collected 68.4 percent of its full-year revenue and grants projection, while 58.4 percent of planned recurrent and capital expenditure had been recorded. The comparatively strong progress in annual revenue collection provides an important foundation for fiscal management during the remainder of the year.
The latest figures also show that revenue growth remains supported by the Maldives’ principal economic sectors, particularly tourism, while tax collections have continued to strengthen. Maintaining revenue momentum, managing recurrent expenditure and addressing financing obligations will remain important elements of the Government’s fiscal programme during the remaining months of 2026.
The Ministry of Finance and Public Enterprises has noted that revenue and expenditure are not distributed evenly throughout the year, meaning figures recorded up to August should not be used independently to determine the final fiscal outcome for 2026.
The ministry has also cautioned that expenditure data represents transactions recorded in government accounts and does not necessarily indicate that every recorded payment has already been settled in cash. Revenue and expenditure figures may therefore be revised as reconciliation and accounting processes continue.
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