The Maldives’ wholesale and retail trade sector showed strong momentum in the first quarter of 2025, driven by surging orders and a significant recovery in financial sentiment. However, business expectations for the upcoming quarter reveal concerns over slowing sales, falling prices, and tightening credit conditions.
According to the Maldives Monetary Authority’s latest Quarterly Business Survey, the sector’s volume of sales index remained steady at a positive 59, unchanged from the previous quarter. Meanwhile, the volume of orders placed with suppliers jumped by 26 points to 90, indicating strong restocking activity. Employment indicators also surged, with the number of employees index climbing 22 points to 77.
Despite these improvements, both cost and pricing indicators pointed to a weakening sales environment. The average selling price index dropped sharply into negative territory, falling 29 points to -14. The cost of sales index plunged 81 points to -12, suggesting that input costs declined, likely due to easing supply chain pressures or inventory corrections.
The financial situation of companies improved notably, rising 79 points into positive territory at 74—the first such increase after six consecutive quarters of negative readings. The overall business situation index also rose by 72 points to 75, with 77 percent of businesses reporting a more favourable business climate.
However, expectations for the second quarter of 2025 paint a less optimistic picture. The index for expected total volume of sales fell by 83 points to -14, and anticipated average selling prices dropped 24 points to -15. Although order placements with suppliers are expected to remain strong, businesses forecast a slowdown in consumer demand.
In terms of employment, the outlook remains robust. Businesses anticipate continued hiring, with the expected number of employees index jumping 66 points to 76. Wages are also expected to rise slightly, with the respective index increasing to 20.
Concerns over financing loom large, as access to credit is expected to deteriorate significantly. The index for expected access to credit plunged to -90, one of the most negative readings across all surveyed sectors. This suggests growing unease over borrowing conditions and liquidity in the months ahead.
Overall, while the wholesale and retail trade sector rebounded sharply in early 2025, the mixed signals from pricing and credit indicators point to a more cautious outlook moving into the second quarter.
