The proposed 2027 State Budget prioritizes infrastructure and development projects, with MVR 8.2 billion allocated for the Public Sector Investment Program (PSIP), Minister of Finance and Public Enterprises Hassan Zareer has said.

Presenting the 2027 Budget to Parliament, Zareer said the government’s primary objective for next year is to complete 70 per cent of ongoing development projects and deliver tangible results to the public. He added that the budget is designed to maintain fiscal sustainability while ensuring development continues without disrupting essential public services.

The government expects to generate MVR 43.2 billion in revenue in 2027, while recurrent expenditure is projected to reach MVR 42.7 billion. It also aims to keep government revenue at no less than 32 per cent of gross domestic product (GDP).

Government direct debt is projected to stand at 117 per cent of GDP in 2027. The government aims to reduce this ratio to 116.3 per cent in 2028 and 107.9 per cent in 2029.

The overall budget deficit is expected to reach MVR 7.6 billion, equivalent to 6.2 per cent of GDP, by the end of 2026. In 2027, the deficit is projected to rise to MVR 9.4 billion, or 7.3 per cent of GDP. However, the government plans to reduce the budget deficit to 5 per cent of GDP by the end of 2028.

The government also aims to ensure that domestic budget financing for the PSIP does not exceed 70 per cent, while keeping interest payments on external loans at 12 per cent of total revenue.

Despite significant challenges facing public finances due to changes in the international economic environment, Zareer said ongoing fiscal controls would help keep the 2026 budget deficit within the approved level. He added that these measures would continue in 2027.