“Dire economic outlook” as budget deficit estimated to reach 27 percent of GDP
07 May 2012, 3:56 PM
Hawwa Lubna
Parliament’s Financial Committee has projected that the Maldives budget deficit will reach 27 percent of the GDP by the end of year 2012, a 175 percent increase on earlier forecasts.
While the 2012 budget put the deficit at less than 9.8 percent of Gross Domestic Product (GDP), the figures revealed by the committee last week shows that the amount will increase up to a staggering 27 percent.
These figures confirm the International Monetary Fund (IMF)’s earlier warnings that the Maldives had “substantially understated” its budget deficit, by underestimating its spending and “probably” overestimating tax revenues.
Head of the Majlis’s Financial Committee, Deputy Speaker and People’s Alliance (PA) MP Ahmed Nazim, revealed to the reporters that government revenue for 2012 will be Rf2.6 billion (US$168.6 million) less than the projected amount of Rf10.87 billion (US$704 million) – a 23 percent plunge.
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