Finance Minister notifies to cease certain government expenditures

Ministry of Finance has notified all government offices to cease certain expenditures.

A circular signed the Minister Abdulla Jihad and sent to all government offices last week said that even though 15 percent of the budget has already been reduced, the government needs to further control its expenditure in order to provide the essential public services.

The Ministry has ordered to cease two particular expenditures completely, which includes all expenditures for travel abroad, except those funded by international parties and those which are absolutely necessary. For absolutely necessary travel, the offices have to request the Finance Ministry for permission.

Also, all repair works scheduled to be carried out and all capital expenditures which do not fall into the PSIP program have also been ordered to be ceased for the remaining part of the year.

“We have to take extra measures to control government expenditure in order to reduce the budget deficit,” states the circular.

Finance Ministry has said that the MVR14 billion budget proposed to the parliament is predicted to increase to MVR18 billion. This will result in a deficit of about MVR3.4 billion. The International Monetary Fund (IMF) has also raised concern about the increasing government expenditure and subsequent increase in deficit. The budget deficit is predicted to rise by 27 percent.

Proposing the budget at the parliament, Finance Minister Abdulla Jihad said that level of debt is beyond what is generally accepted by World Bank and also by other countries, and that it must to be lowered significantly.