Maldives’ real economy showed signs of modest acceleration in the first quarter of 2025, with gross domestic product (GDP) expanding by 2.5 percent compared to the same period in 2024. This marked an improvement over the 1.9 percent growth recorded in the final quarter of last year, according to the latest Quarterly National Accounts released by the Maldives Bureau of Statistics and summarised in the Maldives Monetary Authority’s July 2025 Economic Update.
The key drivers of this uptick were the public administration and construction sectors. Gains were also observed across tourism, retail, real estate, and financial services. However, this positive movement was tempered by continued contractions in the transportation, communication, and fisheries sectors.
While Q1 provided a modest bounce, projections for the full year tell a more subdued story. The Maldives Monetary Authority (MMA) and the Ministry of Finance now forecast real GDP to grow by 4.5 percent under the baseline scenario and 5.6 percent in a more optimistic case. These projections have been revised downward from October 2024 estimates, highlighting more tempered expectations as the year progresses.
Looking back, 2024 closed with a GDP growth rate of 3.3 percent, well below the 5.5 percent forecast published in October 2024. The slowdown is attributed primarily to the tourism sector’s weaker-than-expected performance, although there were still positive contributions from transport, public administration, and real estate.
Tourism, a major engine of the Maldivian economy, saw visitor arrivals rise by 9 percent during the first half of 2025. Yet, despite the boost in numbers, average stay durations fell from 7.6 days in 2024 to 6.8 days this year, which may have muted the sector’s overall economic contribution. The construction sector, meanwhile, continues to ride a wave of public infrastructure projects and private real estate developments, though the pace of growth remains closely tied to government spending capacity and private financing.
The sharp sectoral divergence, with growth in tourism, construction, and administration on one hand and persistent decline in fisheries and transport on the other, underscores the broader structural challenge of diversifying and balancing the economy.
As the year unfolds, the real economy’s performance will hinge not only on the resilience of tourism and public sector-driven activity but also on how well underperforming sectors can recover. For a small, open economy like the Maldives, where external shocks and sectoral dependencies are common, these quarterly shifts remain highly consequential.
