Government proposes MVR 42.7 billion budget for 2023

Finance Minister Ibrahim Ameer presents the projected state budget for 2023 at the parliament on October 31, 2022. (Photo/People's Majlis)

Finance Minister Ibrahim Ameer presented to the Parliament on Monday – a proposed state budget of MVR 42.7 billion for the upcoming year.

As per the government, the main aim of the proposed budget for next year is to bridge the gap with respect to obstructions faced in light of the economic crisis arising as a result of the COVID-19 pandemic, and the hike in prices of goods in the global market due to the Russia-Ukraine war.

The government underscored that Maldives’ GDP has significantly progressed this year, and last year, after the country began to recover from the economic crisis plunged into by the COVID-19 pandemic. Taking these things into consideration – the government projects Maldivian economy to hit pre-pandemic levels by the end of this year. They also project the economy grow by 7.6 percent next year.

With a projected tourist arrival rate of 1.8 million for next year – the government expects tourism industry to hit pre-pandemic levels as well. Apart from this, the government has predicted inflation to increase to 5.4 percent next year considering the increase in prices of goods in the global market, and the increase in prices of goods expected in the Maldives consequent to policy changes.

The government is projected to receive MVR 32.1 billion in revenue and grants next year. This includes MVR 23.4 billion as tax revenue, out of which MVR 3.7 billion is expected from the hike in GST rate – and MVR 6.4 billion in non-tax revenue

The government states that approximately MVR 11.5 billion will need to be secured to finance next year’s budget. Direct debt is estimated to increase by 9.2 percent next year, to stand at MVR 102.0 billion. State expenditure proposed for next year is MVR 40.1 billion.

Noting the high possibility of increase in GDP, in comparison to total debt – the government estimates total debt to decrease to 108.9 percent by the end of next year, after standing at 111 percent by the end of this year.