In a significant demonstration of fiscal consolidation, the Maldives' Sovereign Development Fund (SDF) deposits reached USD 175.1 million by the end of 2025, according to an end-of-year report from the Ministry of Finance and Planning.
This marks a striking 91.2 percent increase from the previous year’s total of USD 90.8 million, a surge that significantly bolsters the nation's financial security and its ability to meet future debt obligations.
This growth in the critical reserve fund was propelled by a remarkable improvement in the nation's fiscal health. The government reported a substantial reduction in its budget deficit, which plummeted by 73.5 percent from USD 849.5 million in 2024 to just USD 227 million in 2025. This was achieved through a combination of robust revenue generation and stringent control over public expenditure.
A key driver was tax revenue, which exceeded budget estimates by 5.5 percent to reach USD 1.89 billion, fueled in part by a thriving tourism sector. The government records indicate that 2.24 million tourists visited in 2025, generating foreign exchange earnings of USD 1.2 billion.
Conversely, total government expenditure was curtailed to USD 2.79 billion, a 10.6 percent decrease from the previous year.
While recurrent expenditures, including costs from public servant salary harmonisation policy, rose to USD 2.35 billion, capital expenditure saw a sharp decline of 48.8 percent to USD 441 million. The Ministry noted that available funds were strategically directed towards priority infrastructure projects like roads, bridges, and airport development.
The Ministry emphasised that the accelerated build-up of the SDF is a vital step in safeguarding the stability of the Maldives' small, open economy against potential external shocks, signaling a positive trajectory for international investors and financial institutions.