Is Maldives going down Sri Lanka's path?: Maldives is increasingly finding it difficult to cover recurrent expenditure

Abstract

Since 1983, Sri Lanka has faced the continuous challenge of its revenue falling short of covering recurrent expenditure. Subsequently, when looking at Maldives’s fiscal performance it seems to echo Sri Lanka’s trajectory. In the post COVID-19 era, Maldives appears to be grappling with a challenge similar to that of Sri Lanka to bridge the gap between Revenue and Grants and Recurrent Expenditure. These parallels suggest that both Maldives and Sri Lanka are facing significant fiscal pressures in the current economic climate.