Medium-term fiscal strategy 2021-2023

Abstract

The Fiscal Responsibility Act (Law Number 7/2013) Chapter 10 requires the Government to submit a Medium-Term Fiscal Strategy Statement to the Public Accounts Committee of the People’s Majlis. This Fiscal Strategy is presented at a time when unprecedented changes are occurring to the Maldivian economy and the financial position of the country. To account for the present circumstances, the direction of fiscal policy must be changed. As such, this Fiscal Strategy focuses on formulating sustainable medium-term policies that will assist in economic recovery. This will also be the basis on which the annual budget 2021 and medium-term budgets are formulated. This statement includes a comparison of the previous Fiscal Strategy and the approved 2020 budget, the revised estimates for the 2020 budget to reflect current circumstances, and medium-term fiscal policy goals and policy implementation. The paper also outlines proposed changes to the revenue and expenditure structure based on medium-term fiscal balance and debt sustainability, and the fiscal space (budget available for new policy initiatives). This Fiscal Strategy is based on the “Medium-Term Fiscal Framework” and baseline budget estimates for revenue and expenditure estimations.