The Maldives recorded USD 1.45 billion in state revenue during the first six months of 2026, representing an increase of USD 129.70 million compared with the corresponding period last year, according to the latest fiscal report released by the Ministry of Finance and Public Enterprises.
Government expenditure also increased during the period, reaching USD 1.51 billion by the end of June, compared with USD 1.25 billion during the same period in 2025. The higher level of expenditure resulted in an overall budget deficit of USD 63.29 million, reflecting increased public spending commitments during the first half of the year.
The fiscal report identified higher subsidy expenditure and increased recurrent spending on public-sector salaries as the principal factors contributing to the deficit. Government spending on subsidies rose by 92 per cent, increasing from USD 90.79 million to USD 181.58 million by the end of June.
The additional subsidy expenditure was directed towards stabilising domestic prices for fuel and essential commodities amid economic pressures associated with the ongoing conflict in the Middle East. The government’s intervention has supported price stability and helped reduce the impact of external market volatility on households and businesses across the Maldives, an island economy that remains highly dependent on imported fuel, food and other essential goods.
Recurrent expenditure on state salaries increased from USD 466.93 million during the first half of 2025 to USD 505.84 million during the same period this year. The increase was attributed to the implementation of the government’s pay harmonisation initiative, which is intended to improve consistency and fairness across public-sector salary structures.
Despite the rise in expenditure, tax revenue continued to demonstrate positive growth. Total tax collections reached USD 1.12 billion, compared with USD 985.73 million during the corresponding period last year, highlighting the continued contribution of domestic economic activity and the country’s major revenue-generating sectors to public finances.
Corporate income tax collections reached USD 110.25 million, representing an increase of USD 6.34 million, or 6.2 per cent, compared with the same period in 2025. The growth in corporate tax receipts provides a positive indication of business performance and compliance within the Maldivian economy.
Foreign grant assistance also exceeded the government’s target during the period. Grant receipts reached USD 434.2 million against a projected USD 373.6 million, surpassing the target by USD 60.6 million. The higher-than-anticipated grant inflows strengthened overall revenue performance and provided additional support for the government’s development and public service priorities.
The Ministry of Finance and Public Enterprises stated that government revenue remains sufficient to meet general operating expenses. The state recorded a primary surplus of USD 110.25 million during the first six months of the year, indicating that revenue was adequate to cover general expenditure before accounting for debt repayments.
The primary surplus reflects the government’s capacity to finance its core operations while continuing to manage higher subsidy costs, salary-related expenditure and external economic pressures. Continued growth in tax collections, corporate income tax and foreign grant assistance is expected to remain important to maintaining fiscal stability and supporting sustainable economic development in the Maldives.
advertisment
advertisment
