Government Spending Rises 17.6 Percent as Infrastructure Outlay Tops MVR 2 Billion

MALE’ — Government spending rose 17.6 percent in the first five months of 2026 compared to the same period last year, driven by higher infrastructure investment, salary costs and a near doubling of subsidy expenditure, according to the Finance Ministry’s latest fiscal development report.

Total recurrent and capital spending reached MVR 19.2 billion by 4 June, up from MVR 17.6 billion a year earlier.

Capital expenditure came in at MVR 2.32 billion, compared to MVR 1.86 billion in the same period last year. Within that, spending on infrastructure alone exceeded MVR 2 billion, up from MVR 1.65 billion a year ago.

Recurrent spending also rose, reaching MVR 16.87 billion against MVR 14.47 billion in the same period of 2025. Salaries and pensions accounted for MVR 6.6 billion of that, roughly MVR 600 million more than the previous year.

Subsidy expenditure nearly doubled. The government spent MVR 2.3 billion on subsidies by 4 June this year, compared to MVR 1.3 billion over the same period in 2025. The Finance Ministry attributed the increase to rising global fuel prices driven by the conflict in the Middle East.

On the revenue side, total income including grants reached MVR 19.1 billion by 4 June, up 10.1 percent from MVR 17.3 billion a year earlier. Tax revenue accounted for 78 percent of total income, rising 12.4 percent to MVR 14.8 billion from MVR 13.2 billion.

Tourism GST was the main driver of the revenue increase, climbing from MVR 5.6 billion to MVR 6 billion. General GST also rose, from MVR 2.2 billion to MVR 2.5 billion.

Figures are drawn from the Finance Ministry’s weekly Fiscal Development Report to 4 June 2026.