The budget is a document which provides estimates for revenue, expenditure and borrowing; and outlines the fiscal policy of the government for a specified period ahead.
The Minister of Finance is responsible for preparing the budget and submitting it to the People’s Majlis (parliament) for approval as stipulated in Article 32 of the Public Finance Act 2006 (PFA). According to the PFA “for each financial year, the minister must prepare and submit the budget to the parliament two months prior to the beginning of the fiscal year”.
The fiscal year of the Maldives runs from 1st January to 31st December.
The Approved Budget for 2023 is MVR 42.8 billion of which total expenditure is MVR 40.7 billion. The government is expected to receive MVR 32.1 billion as revenue and grants in 2023. The budget deficit for 2023 is 8.6 billion, amounting to 8.3% of GDP.
Please click the link below to access to the Budget 2023 website.
The links to the budget documents are also available on the Ministry of Finance's website
Fiscal policy is one of the tools used by the government to achieve its economic and social objectives. In the Maldives, the fiscal policy framework is governed by the Fiscal Responsibility Act 2013 (FRA). The FRA came in force in 2014 with the objective of achieving fiscal stability, improving fiscal transparency and enhancing the accountability of the government to the parliament.
The FRA sets certain fiscal rules such as the balance budget rule and the debt rule and defines the escape clauses for the rules. The FRA also requires the government to submit to the Majlis a “Statement of Fiscal Strategy”, and a “Statement of National Debt Strategy” before July each year. The “Statement of Fiscal Strategy” sets out the medium-term fiscal framework and annual expenditure ceilings that are consistent with achieving the fiscal objectives. The “Statement of National Debt Strategy” provides information regarding the steps being taken by the government to repay and maintain national debt in a sustainable and efficient manner.
The FRA also requires the government to submit a “Budget Position Report” to the People’s Majlis every year, after the national budget for the following year is presented to the People’s Majlis. The purpose of the report is to ensure that the policy actions taken by the government are in accordance with the policy strategies proposed in the “Statement of Fiscal Strategy”
The Fiscal Responsibility Act 2013 (FRA) requires the government to submit to the Majlis a “Statement of Fiscal Strategy" before July each year. This Statement sets out the medium-term fiscal framework and annual expenditure ceilings that are consistent with achieving the fiscal objectives.
Balance budget rule: There are two provisions currently contained in the FRA - the primary balance to be in surplus by end of the year 2016 and the overall budget deficit to be reduced to levels not exceeding 3.5 percent of GDP by end of the year 2016; and maintained at that level thereafter.
Debt Rule: The FRA specifies that debt as a percent of GDP be maintained at levels not exceeding 60 percent by end of the year 2016. Thereafter, for the next five years, the required level of debt is to be determined and specified by the Minister of Finance and Treasury. The law also specifies that post January 01, 2016 loans taken by the government should only be for national development projects (meaning that loans should not finance recurrent expenditure).
Exceptions to the adherence to the stipulated fiscal rules are allowed in two instances: (a) natural disaster and (b) economic downturn.
The FRA also provides for the establishment of a Fiscal Reserve – at a time when the government achieves a primary balance surplus. A portion of the primary surplus, as determined by the Minister of Finance and Treasury will be credited to the Fiscal Reserve.
The budged process can be divided into two phases:
Budget process begins in March with the preparation of the medium term macro-fiscal framework which includes the development of the macroeconomic outlook, revenue forecasts, the fiscal outlook and baseline expenditure. In March, the Ministry issues the Budget Circular I upon consultation with the cabinet and baseline expenditure, requesting the individual ministries and departments to provide information on the new policy initiatives (NPIs) for the forthcoming year.
Once the NPIs are received, the Ministry conducts a technical evaluation of the NPIs and submits the mid-year budget package along with the NPIs for recommendation of the cabinet.
The Ministry then prepares a fiscal strategy, which includes a target for the overall budget balance for the upcoming fiscal year and for the subsequent two years- on the basis of the macro-fiscal framework within which all budget revenues are forecast along with financing availability, identifying the overall spending limits.
Based on the fiscal strategy, Ministry issues the Budget Circular II in July requesting individual ministries and departments to provide information on the regular and extra budgetary information on actual out-turn for the past year, revised estimates for the current year, and expenditure proposals for the forthcoming year providing clear instructions and guidelines, indicating firm expenditure ceilings for line ministries and spending agencies, in accordance with the strategic priorities of the government.
Once the requested data and estimated budgets are received, it is evaluated by the Ministry. The evaluation process first includes a technical assessment, followed by technical and ministerial meetings with the organizations. These meetings help to cap expenditures on ceilings provided to each ministry and independent organizations.
The budget is then consolidated on the basis of the information provided by ministries and departments, in consultation with the Economic Youth Council of the President’s Office. The final budget is sent to the Majlis in late October for approval before the end of the year.
The following contain links to current & past budget documents if they were published in that year. All these documents are in Dhivehi language. The publication budget in statistics provides the English translation of the approved budget.