Finance Minister Moosa Zameer says due to bludgeoning government costs in recent years, the current reality is that the government has to spend every MVR 23 of MVR 100 in its revenue on debt repayments and interests.
He made these comments while presenting the proposed annual state budget to the Parliament today.
The Minister said in the name of further expanding the economy and expenditure on essential services to the people, government spending has increased in recent years to a level that does not match the economy and state revenue.
He noted that 5 years ago the state budget stood at MVR 28.2 billion. However, he said this number has reached MVR 50.9 billion by 2023 and that this means public debt as a percentage of GDP has reached 124 percent.
The Minister revealed that this means for every MVR 100 in state revenue, MVR 23 has to be spent on debt repayment and interest.
Minister Zameer stated that another consequence of the lack of financial planning in recent years is that the government has been unable to its contractors and vendors and that the bills have piled up.
He also said that in recent years, the state finances have been on the verge of collapse due to the implementation of a destructive fiscal policy without planning and responsibility.
He added that the obvious result is that the entire country is in danger.
