President Dr Mohamed Muizzu has asserted his intention to implement measures aimed at eliminating the entrenched culture of excessive expenditure that exceeds the state's income. This declaration came during his presidential address at the inaugural session of Parliament for 2025.
In his address, President Dr Muizzu outlined his administration's strategic vision to enhance revenue streams while curtailing expenditure. Upon assuming office in November 2023, according to President Dr Muizzu, he immediately prioritised economic recovery measures to confront the severe fiscal challenges.
Reflecting on the past year, he asserted that his administration had undertaken substantial and effective measures to reduce expenditure and augment revenue. Despite these efforts, he acknowledged the persistent challenges in meeting these fiscal objectives.
Among the primary obstacles, Dr Muizzu identified the deeply ingrained culture of high spending and low income. He stressed the critical need to reform this paradigm to ensure fiscal stability. "Addressing this significant national and financial challenge is imperative," he stated, noting that the reform measures introduced by his administration are being implemented with expediency.
Turning to future plans, President Dr Muizzu outlined his administration's initiatives to reduce government spending, enhance state income, and lower the budget deficit. Measures will be instituted this year to decrease the budget deficit and maintain low government borrowing, he asserted.
"Our aim is to reduce this year’s budget deficit to USD 609.08 million through measures to cut down spending and increase revenue. Previously, in 2024, the budget deficit stood at USD 881.50 million, and in 2023, it was at USD 693.78 million," he stated.
Dr Muizzu assured the public that, despite efforts to reduce costs and enhance revenue, the quality of public services would remain uncompromised and the pace of developmental initiatives would not diminish. The administration remains confident in its ability to sustain fiscal stability, he added.
For the current year, the government submitted a national budget of USD 3.67 billion, with expected expenditure reaching USD 3.19 billion. Recurrent expenditure is projected at USD 2.32 billion, while capital expenditure is set at USD 862.98 million. The administration plans to allocate USD 804.40 million to the Public Sector Investment Programme (PSIP). Additionally, the government anticipates generating a total income of USD 2.57 billion, including foreign aid.