ADB Keeps Maldives Growth Forecast at 1.0% for 2026

The Asian Development Bank has kept its growth forecast for the Maldives unchanged for 2026 and 2027, even as it lowered its wider outlook for developing Asia and the Pacific due to disruptions in energy markets, higher freight costs and weaker regional demand.

In its Asian Development Outlook July 2026, ADB projected the Maldivian economy to grow by 1.0% in 2026 and 3.0% in 2027. Both forecasts remain unchanged from its April outlook. This marks a sharp slowdown from the 6.3% growth recorded in 2025.

The unchanged projection suggests that ADB has not revised its near-term assessment of the Maldives, despite a more fragile regional environment. However, the report points to risks that are particularly relevant for an import-dependent economy such as the Maldives.

ADB said the Middle East conflict has created a major energy shock, raising oil and gas prices, disrupting supply chains and increasing transport costs across Asia and the Pacific. The bank lowered its growth forecast for developing Asia and the Pacific to 4.9% in 2026, down from 5.1% projected in April.

South Asia’s growth forecast was also reduced to 6.0% in 2026, reflecting higher oil prices, rising freight costs and uncertainty over remittances from Gulf economies. The Maldives was among the economies in the subregion whose growth forecasts were left unchanged.

The more immediate concern for the Maldives is inflation. ADB retained its inflation forecast for the country at 5.0% in 2026 and 4.0% in 2027. The report said subdued price readings earlier in the year are expected to give way to higher energy-driven inflation in the second half of 2026, given the Maldives’ high dependence on imports of fuel and other goods.

That assessment is significant for the Maldives, where most consumer goods, construction materials, fuel and food items are imported. Higher fuel prices can feed into transport, electricity generation, freight, food distribution and tourism-related operating costs. Even when global prices ease, the pass-through to domestic prices can take time, particularly when shipping and insurance costs remain elevated.

ADB also warned that inflationary pressure across the region has moved beyond energy. Higher input and logistics costs are now feeding into food and core inflation, while higher fertiliser prices could add further pressure to food prices. For the Maldives, this adds another layer of exposure because the country relies heavily on imported food and has limited domestic production capacity.

The bank said oil prices had fallen from their early April peak, but remained above pre-conflict levels. It revised its Brent crude oil price forecast to USD 87 per barrel in 2026 and USD 77 per barrel in 2027, reflecting continued market disruption and geopolitical risk.

The report also noted that fiscal pressures are rising across the region as governments respond to higher fuel and energy costs. For the Maldives, this comes at a time when public finances remain under pressure from debt servicing, import costs and the need to manage subsidies and administered prices without worsening fiscal vulnerabilities.

ADB said the main risks to the regional outlook include renewed escalation in the Middle East, prolonged energy market uncertainty, tighter global financial conditions, food price pressure and renewed trade policy uncertainty.

For the Maldives, the July outlook points to a difficult balance. Growth is expected to remain weak in 2026 before improving in 2027, but the country remains exposed to external shocks through fuel imports, freight costs, food prices and tourism-related demand. The unchanged forecast therefore does not remove the underlying risk that imported inflation and higher operating costs could weigh on households, businesses and public finances in the months ahead.