As we approach the conclusion of the seventh month of the fiscal year, the budget deficit has expanded by MVR 1.5 billion to reach MVR 6 billion, showcasing a notable rise compared to the corresponding period in the prior year.
Reports on expenditure and revenue, disseminated by the finance ministry, illustrate that the government’s outlays have accumulated to MVR 28.5 billion as of August 10.
This translates to an average daily expenditure of MVR 12.9 million, signifying a surge of MVR 3.8 billion when juxtaposed with the analogous period from the previous year. Notably, the corresponding figure for the prior year stood at MVR 24.8 billion.
Conversely, the government’s revenues and grants amounted to MVR 21 billion, marking an increase of MVR 2.9 billion when contrasted with the previous year. This revenue inflow, however, pales in comparison to the expenditures, resulting in a budget deficit of MVR 5.10 billion. This is an escalation of 33.7%, representing a net augmentation of MVR 1.5 billion.
As the fiscal year progresses, the budget deficit is projected to ascend further, potentially reaching MVR 8.6 billion by year’s end. Addressing this shortfall, the government recently secured a 50 million euros (MVR 842.8 million) loan from a foreign private creditor, a measure intended to bolster budgetary requirements.
The government’s strategy to counter the budget deficit encompasses a multi-pronged approach, incorporating various financial instruments:
- Foreign loans: MVR 4.1 billion
- Green/Blue Bonds: MVR 771 million
- Loans from foreign nations: MVR 1.5 billion
- Domestic loans and bonds: MVR 4.7 billion
In the face of mounting budgetary challenges, the government remains focused on implementing a diversified set of financial strategies to manage and mitigate the expanding deficit.
