Finance Minister: Pandemic will result in MVR 36 billion loss in state’s income

Finance Minister Ibrahim Ameer states the ongoing COVID-19 pandemic is expected to result in an MVR 36 billion loss in income to the state.

At the inauguration of a program to familiarize newly elected councilors to the public finance regulation on Sunday, Ameer noted that the world is in the middle of an economic crisis due to the ongoing pandemic, heightening the need to be cautious in making expenditures.

Highlighting on the need to manage block grants and income earned by councils, Ameer said that councils need to prioritize essential public services.

“We all need to understand that now is not a time we can do everything we want to, no matter how much we want. The state’s income has begun dropping drastically with this crisis. Based on the 2020 medium-term fiscal policy, which is beginning of 2020 to end of 2022, this pandemic will result in an MVR 36 billion loss in state’s income. This is a loss of approximately USD 2.3 billion,” he said.

Ameer said that expenditures need to be cut and benefits from each expenditure maximized in order to minimize the shocks from the loss.

“The biggest medium-term target of the Finance Ministry is to reduce the debt which rose as a result of this pandemic against the GDP as soon as possible. We can achieve this through economic diversification, through increasing the national GDP as soon as possible, and through fiscal consolidation. This will be the target for the 2022 budget,” he said.