Maldives Development Update : Navigating Choppy Seas
Driven by a rebound in tourism, Maldives’ economy recovered sharply in 2021, and poverty is expected to return to pre-pandemic levels by 2023. In 2020, the outbreak of COVID-19 hit international travel and tourism severely and, thus, caused a 33.5...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099240106152215221/P1774450f6c58a0140af4d0df92d59263c7 http://hdl.handle.net/10986/37662 |
| Summary: | Driven by a rebound in tourism,
Maldives’ economy recovered sharply in 2021, and poverty is
expected to return to pre-pandemic levels by 2023. In 2020,
the outbreak of COVID-19 hit international travel and
tourism severely and, thus, caused a 33.5 percent
contraction in Maldives’ GDP. However,following a successful
nationwide government vaccination campaign, tourism has
begun to recover strongly in the second half of 2021, with
arrivalsreaching 1.3 million in 2021 or about 78 percent of
prepandemic levels. As a result, GDP growth is estimated to
have bounced back by 31 percent in 2021. All sectors, except
for construction which remains sluggish, showed a
significant rebound, particularly in the second quarter of
2021 due to the low base effect. The poverty rate, which
rose sharply to 11 percent in 2020 due to the COVID-19
pandemic, is estimated to have fallen to 4 percent in 2021.
External imbalances improved along with the economic
recovery and rebound in tourism. While vulnerabilities
remain, the fiscal and debtposition has likely improved in
2021 due to strong revenue growth. Although the economy is
expected to grow strongly in the medium-term, the ongoing
Russia-Ukraine war could impact Maldives’ tourism recovery
and growth in the near term. The impact of the
Russia-Ukraine war will depend on the period of interruption
and whether tourists from other countries can compensate for
the loss. |
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