Maldives to limit expenditure amid rising global inflation

Finance Minister Ibrahim Ameer | Photo: Sun

Malé, Maldives – Ministry of Finance has yesterday announced cost-cutting measures applicable to various areas of the government.

In a circular issued by the Ministry, the rising global inflation rates of fuel and other goods caused due the Russia-Ukraine war was referred to, detailing that it has caused the government’s expenses to soar excessively beyond previous forecasts, which in turn makes it difficult to manage expenses within the income and financing received.

“Amidst a situation where the interest rates are rising globally, if expenses are not controlled and deficit increases, the state’s budget will be further burdened to finance this deficit,” the circular reads. As such, the circular stated that taking on such a burden is not advisable in this situation, the time to economise is essential.

Cost-saving measures mandated in the circular include putting a pause on creating any new designations, and changing salary structures, as well as disseminating any new allowances that aren’t already being issued, inclusive of promotions, any change in salaries and allowances.

Additionally, all international trips which have to be funded by the government will also be stopped, while domestic travel will require the approval of Finance Ministry.

As for office management expenses, construction and maintenance, which is to be carried out only on a need-only basis, any such expense exceeding MVR 5,000 also requires an approval from the Ministry, while scholarships will no longer be given out until further notice, and organising training programs which costs more than MVR 5,000 is subject to prior approval from the Ministry of Finance. Capital expenses exceeding MVR 5,000 also requires approval from the Ministry.

This circular is effective today, which is applicable to all offices excluding local councils.