Record US$2 billion budget passed for 2019

An MVR30.2 billion (US$2 billion) budget for 2019 was unanimously approved by parliament Wednesday night.

The record-high budget was passed with changes made during the committee stage to add MVR452 million to the public sector investment programme, MVR50 million to the higher education ministry’s budget, MVR37 million to the judiciary’s budget, MVR31 million to the People’s Majlis budget, MVR25 million to the foreign ministry’s budget, MVR2 million for the Family Protection Authority, and MVR1 million for former presidents.

The budget submitted for parliamentary approval was MVR29.6 billion.

Along with the additional funds, the review committee also tacked on several non-binding recommendations, including introducing a personal income tax, continuing ongoing domestic airport projects, and conducting an audit of government offices.

The 2019 budget was formulated before President Ibrahim Mohamed Solih took office on November 2018.

His transition committee on finance told the press they were unable to incorporate all of the ruling coalition’s manifesto pledges due to a lack of time and fiscal space.

But funds were allocated for signature initiatives such as providing a healthy breakfast for school children and covering tuition fees for students pursuing first degrees in Maldivian institutions.

Ongoing projects to build harbours and regional airports and establish sewage on several islands would continue and funds were allocated to build an airport on Muli island in Meemu atoll, upgrade the northernmost Hanimadhoo airport, and to conduct a feasibility survey for an airport on Makunudhoo island in Haa Dhaal atoll.

As a result of the former administration’s Chinese-funded infrastructure projects, public debt stands at MVR48 billion.

While the forecast for total expenditure next year is MVR27 billion, nearly MVR3 billion is earmarked for loan repayment. The budget deficit is projected at MVR4 billion with MVR23.3 billion estimated as revenue and grant.