Ministry of Finance has proposed a State Budget of USD 2.26 billion for 2021.
The State Budget was presented to the Parliament of the Maldives by Minister of Finance Ibrahim Ameer. Speaking at the budget presentation, Minister Ameer said state expenditure is projected to be USD 2.16 billion, with an additional USD 97 million added for debt repayment. The minister noted income is projected to be low next year, with USD 1.16 billion projected to be received as income and foreign grants. He added the budget deficit is expected to be at USD 1 billion, representing 23.4% of the Gross Domestic Product (GDP).
The finance minister stated the budget was prepared based on the priority areas highlighted in the National Resilience and Recovery Plan, which was prepared by the National Taskforce on Resilience and Recovery following the COVID-19 pandemic. The minister noted high-level discussions were held among working groups of the taskforce, with consultation of stakeholders from a wide range of sectors.
Speaking further, Minister Ameer noted the COVID-19 pandemic has brought unprecedented times for the Maldives and the whole world, adding no other event in history has devastated the economy as much. Noting tourist arrivals in the Maldives had been on a double-digit growth rate prior to the pandemic, the minister said the government entered 2020 hoping to fully implement the plans formulated to fulfill its economic pledges. However, he noted the pandemic brought a complete stop to the fast-growing economy of the Maldives.
International Monetary Fund (IMF) projects global GDP growth to be at 5.4 percent in 2021. Overall, this would leave 2021 GDP some 6.5 percentage points lower than in the pre-COVID-19 projections of January 2020.