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Maldives Development Update, April 2025

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dc.contributor.authorWorld Bank
dc.date.accessioned2025-04-23T12:21:34Z
dc.date.available2025-04-23T12:21:34Z
dc.date.issued2025-04-23
dc.description.abstractIn 2024, economic growth remained robust with an estimated real GDP growth of 5.5%, primarily driven by a strong performance in tourism, which saw a 7.1% growth in the first three quarters. Tourist arrivals increased by 8.9% to a record 2.05 million. However, headline inflation surged in the last quarter, averaging 1.4% for the year, with food inflation remaining elevated at 6.6%. The fiscal deficit widened to MVR 12.7 billion (11.7% of GDP) due to increased expenditure, while revenue collection rose by 3.7%. The current account deficit (CAD) remained high, with the trade deficit widening to US$3.3 billion. Foreign exchange reserves fell to critically low levels but recovered to US$832.1 million by February 2025, supported by a currency swap agreement with the Reserve Bank of India. The financial sector's exposure to sovereign and state-owned enterprises (SOEs) debt increased, while credit growth to the private sector moderated. Public and publicly guaranteed (PPG) debt rose to US$9.4 billion (134.2% of GDP). Medium-term growth is projected to be 5.7% in 2025, supported by increased tourist arrivals due to the completion of a new terminal at Velana International Airport. Inflation is expected to rise, potentially increasing poverty unless targeted cash transfers are introduced. The fiscal deficit is likely to remain elevated, with public debt projected to rise to 135.7% of GDP by 2027. Significant downside risks include global trade uncertainties and elevated external and fiscal vulnerabilities. Urgent fiscal consolidation and a clear financing strategy are required to reduce vulnerabilities and ease liquidity pressures.en
dc.identifierhttp://documents.worldbank.org/curated/en/099820504212597344
dc.identifier.doi10.1596/43113
dc.identifier.urihttps://hdl.handle.net/10986/43113
dc.languageEnglish
dc.publisherWashington, DC: World Bank
dc.rightsCC BY-NC 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/igo
dc.titleMaldives Development Update, April 2025en
dspace.entity.typePublication
okr.date.disclosure2025-04-23
okr.date.doiregistration2025-04-25T02:17:42.032681Z
okr.date.lastmodified2025-04-23T11:04:29Zen
okr.doctypeEconomic & Sector Work
okr.doctypeEconomic & Sector Work::Economic Updates and Modeling
okr.docurlhttp://documents.worldbank.org/curated/en/099820504212597344
okr.guid099820504212597344
okr.identifier.docmidIDU-9d7960aa-67b9-4afb-909a-d37283076022
okr.identifier.externaldocumentum40008218
okr.identifier.internaldocumentum40008218
okr.identifier.report200698
okr.import.id7199
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttps://documents.worldbank.org/curated/en/099820504212597344/pdf/IDU-9d7960aa-67b9-4afb-909a-d37283076022.pdfen
okr.region.administrativeSouth Asia
okr.region.countryMaldives
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicMacroeconomics and Economic Growth::Inflation
okr.unitESAC1 - EFI-SAR-FCI-TIC-Finance
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