Finance Minister Ibrahim Ameer has said that the budget for the current year must be supplemented by another MVR 5.8 billion.
Presenting the budget for next year in Parliament Monday, Minister Ameer said the volatile global economy has increased expenditure. The Russian-Ukrainian war has put pressure on the budget due to rising oil and commodity prices, he said. Although the budget for oil subsidies this year was set at MVR 342 million, it is now estimated that MVR 2.3 billion will be spent on oil subsidies by the end of this year, he said.
Ameer said this year's budget needs more funds, and the increase will be financed by loans received for projects and money from the domestic market.
The Finance Ministry has already predicted that the government will have to present a supplementary budget this year to cover the increased expenditure.
The Ministry of Finance's Fiscal Strategy Statement 2025-2023 forecasts expenditure at MVR 39.7 billion. This is a 16.5 percent increase over the previous estimate. The statement noted the need for a supplementary budget and said government expenditure on programs would have to be reduced significantly.
Government's Third Supplementary Budget
President Ibrahim Mohamed Solih took office on November 17, 2018, and passed a supplementary budget of MVR 1.7 billion in August 2019. It was approved with an estimated amount to be spent from August 2019 to the end of that year.
The government also got a supplementary budget of MVR 2.2 billion approved for 2021 after the allocated budget for that year proved to be insufficient. The supplementary budget was presented along with the 2022 budget.
The total budget for this year is MVR 37 billion. The government is expected to receive MVR 24.3 billion in revenue and expenditure of MVR 34.1 billion. Therefore, the budget book shows this year's budget as MVR 9.8 billion. However, the government debt is expected to rise significantly by the end of the year. The state tax authority, MIRA collected MVR 16.6 billion in revenue as of September this year.