Govt. spends MVR 9.38B on salaries and allowances, an 11% increase

State expenditure on salaries, allowances, and pensions for public sector employees has reached MVR 9.38 billion (MVR 9,384.4 million).

According to the latest 'Weekly Fiscal Developments' report published by the Finance Ministry, the figure accounts for state expenditure on salaries, allowances and pension as of August 13^th, marking an 11.2 percent increase compared to the MVR 8,441.5 million spent during the corresponding period last year.

Finance Ministry attributed the increase in personnel expenditure to recent adjustments to civil service allowances and the government's ongoing efforts to harmonize salaries.

Direct salary payments recorded a 14.2 percent increase. While MVR 3.8 billion was spent on salaries by August 13 last year, expenditure rose to MVR 4.3 billion during the same period this year. Meanwhile, spending on various employee allowances increased from MVR 3.4 billion to MVR 3.7 billion.

Expenditure on pensions and retirement benefits also increased compared to the previous year. Spending in these categories rose from MVR 1.2 billion last year to MVR 1.4 billion this year. The figure includes MVR 908.7 million spent on basic pensions and MVR 460.8 million on retirement benefits.

Alongside the increase in salaries and allowances, overall state expenditure has also risen. As of August 13, combined recurrent and capital expenditure had increased by 19.3 percent to MVR 28 billion, compared to MVR 23 billion recorded during the corresponding period last year.

Recurrent expenditure, which accounts for the largest share of government spending, increased from MVR 20 billion to MVR 24 billion. Although MVR 17.09 billion was allocated in this year's state budget for employee salaries and allowances, approximately 54.9 percent of the allocation had already been utilized by mid-August.

As salary and recurrent expenditures continue to increase, the Maldives is also confronting a number of economic challenges, including a shortage of foreign exchange. The price of the US dollar on the black market has reached unprecedented levels, contributing to rising costs for goods and services.