Despite lower overall spending, government salary costs rise by MVR 80 million

President Dr Mohamed Muizzu arrives at the PNC rally held in Male' city on October 1, 2025. (Photo/PNC)

The government's fiscal performance in early 2026 presents a distinctive contrast between broad budgetary consolidation and specific, growth-oriented salary costs. While total expenditure has retreated due to curtailed operational and administrative outlays, the wage bill—encompassing salaries, allowances, and pensions—has registered a notable increase. This development, occurring amidst an election cycle, has triggered discussions regarding public sector employment expansion and its long-term budgetary impact. Nevertheless, the state continues to maintain a healthy fiscal surplus, signaling that overall spending discipline is largely effectively managed across the wider ledger.

Government salary expenditure rose by MVR 80 million despite overall reduced spending.
Total expenditure declined from MVR 8.1 billion to MVR 7.27 billion.
Recurrent spending saw a significant reduction of MVR 780 million.
Fiscal surpluses for both total and primary balances have strengthened compared to last year.

Government spending on salaries, allowances and pensions has increased this year despite an overall decline in total expenditure.

According to Finance Ministry data, the state spent MVR 2.7 billion on salaries as of March 19, an increase of about MVR 80 million compared to the MVR 2.65 billion spent during the same period last year.

The government has faced criticism for expanding public-sector employment ahead of the upcoming elections, even as global economic pressures persist.

While salary expenditure has risen, recurrent expenditure has fallen significantly. Recurrent spending stood at MVR 7.38 billion last year, compared to MVR 6.6 billion this year, a reduction of MVR 780 million. The main driver of this decline is the drop in administrative and operational expenses, which fell from MVR 4.73 billion to MVR 3.88 billion.

Total government expenditure also decreased, from MVR 8.1 billion to MVR 7.27 billion. Capital expenditure dropped from MVR 721 million to MVR 665 million.

The overall fiscal balance recorded a surplus of MVR 2.1 billion, compared to MVR 873.7 million during the same period last year. The primary balance also posted a surplus of MVR 2.68 billion.

The figures show that although the government has reduced operating costs, spending on public‑sector salaries and pensions continues to rise.

By Azhaar Abdul Azeez

Writer