The latest Economic Update released by Maldives Monetary Authority suggests that the Maldivian economy continues to expand, though recent data highlights changing conditions that are likely to shape business decisions in 2026.
According to the update, real GDP grew by 8.6 percent in the third quarter of 2025 compared with the same period in 2024, marking a slight slowdown from the previous quarter. Growth was led primarily by tourism and fisheries, with additional contributions from financial services, transport and communication, manufacturing, and real estate. For the full year, real GDP growth is now projected at 5.4 percent, reflecting a downward revision from earlier forecasts and signalling a more moderate expansion outlook for businesses planning investments and capacity expansion.
Tourism data points to strong headline performance but softer underlying utilisation. Tourist arrivals rose by 10 percent in 2025, while total bednights increased by just 2 percent. In December alone, arrivals grew by 7 percent year on year, supported mainly by markets such as China and Russia. However, occupancy rates declined to 62 percent, down from 66 percent a year earlier, as bed capacity expanded by more than 4,000 beds. For tourism operators and investors, the data indicates rising competition and shorter average stays, with the average length of stay falling to 7.0 days from 7.4 days in 2024.
Inflation eased sharply toward the end of the year, with annual inflation slowing to 0.4 percent in December 2025. Lower electricity prices were a key factor behind the deceleration, while food related categories such as fish, fruits, and dining services continued to exert upward pressure. For businesses, the subdued inflation environment may offer some relief on operating costs, though sector specific price movements remain uneven.
On the fiscal side, government revenue excluding grants increased by 13 percent in November 2025, driven by higher tax collections. At the same time, total expenditure declined, largely due to reduced capital spending, while recurrent expenditure continued to rise. Total government debt reached MVR 130.2 billion by the end of the third quarter, equivalent to 112 percent of GDP, with domestic borrowing accounting for most of the increase. This mix of stronger tax intake and constrained capital spending has implications for contractors, suppliers, and firms reliant on public sector projects.
Monetary conditions remained expansionary. Broad money grew by 21 percent year on year by December 2025, supported by higher deposits and increased credit to both government and the private sector. Credit to the private sector expanded by 13 percent, with tourism accounting for the largest share at 36 percent. Lending growth in tourism was driven by financing for new resort developments, renovations, guesthouses, and working capital, underscoring continued confidence among lenders in the sector despite signs of moderating returns.
External sector indicators showed mixed signals. Exports increased by 9 percent in November 2025, mainly due to higher re exports, including jet fuel, and stronger earnings from processed tuna products. Imports, however, rose by 30 percent over the same period, reflecting broad based increases across fuel, machinery, construction materials, and food items. While gross international reserves improved markedly to US$ 983 million by the end of December, the widening import bill remains a key consideration for businesses exposed to foreign currency costs.
Overall, the January 2026 Economic Update presents a picture of an economy that is still growing, but at a more measured pace. For the corporate sector, the data points to sustained opportunities in tourism, finance, and services, alongside tighter margins, greater competition, and closer scrutiny of costs as capacity expands and macroeconomic conditions evolve.
