The Maldives Monetary Authority has advised the government to restrain growth in recurrent expenditure and accelerate revenue measures as it considers the proposed 2027 budget.
In recommendations on the budget, which projects a deficit equivalent to about 7 per cent of GDP, the MMA said recurrent spending growth must remain below the rate of revenue growth, as required under the Public Finance Act. It called for reduced overall expenditure and the swift implementation of sustainable revenue policies to support the medium-term target of bringing the overall deficit to 5 per cent of GDP by the end of 2028.
No new major revenue measures are planned for the coming year. The authority therefore urged fuller implementation of existing policies and faster legislative reforms to strengthen revenue administration, including higher collections of corporate income tax from the tourism sector.
On expenditure, the MMA recommended reviewing the current blanket subsidy approach and moving toward a targeted system. It also supported planned reforms to the Aasandha healthcare scheme through a co-payment system from January 2027 and expansion of bulk procurement to lower costs.
