The Maldives’ economic performance in the fourth quarter of 2024 and the first quarter of 2025 reflects a period of moderated growth, steady recovery in key sectors, and mounting fiscal and inflationary pressures. Here’s an overview of the latest economic indicators released by the Maldives Monetary Authority (MMA) and the Maldives Bureau of Statistics (MBS).
The most recent Economic Update, produced by the Research Division of MMA, was developed using the latest available data as of 28 May 2025.
GDP Growth Slows in Q4 2024
According to the advance estimates of the Quarterly National Accounts, real GDP expanded by 3.0 % in the last quarter of 2024 compared to the same period in 2023—marking a slowdown from the 6.6 % growth recorded in the third quarter of last year. This deceleration was primarily due to contractions in the fisheries and manufacturing sectors, despite robust activity in public administration, tourism, transport, and real estate.
For the full year, real GDP is estimated to have grown by 5.1 %, slightly below the October 2024 forecast of 5.5 %. Looking ahead, revised projections anticipate a stronger 6.4 % growth in 2025, with transportation, communication, and tourism expected to drive performance.
Tourism Sees Strong Arrivals but Shorter Stays
Tourism—Maldives’ economic backbone—continues to show strength in visitor numbers, though trends signal evolving challenges. In April 2025, tourist arrivals increased by 18 % year-on-year, reaching 198,322 visitors. European markets remained dominant, with the UK, Russia, Germany, Italy, and China topping the list.
Despite a rise in arrivals, total tourist bednights fell by 4%, driven by a 5% decline in resort stays that offset a 1% increase in guesthouse bednights. The average stay shortened to 6.9 days (Jan–Apr 2025), compared to 7.8 days in 2024. Meanwhile, operational bed capacity grew by 144 beds, though the occupancy rate dipped to 60% from 62% a year earlier.
Inflation Rises to 5.6 % in April
The annual inflation rate climbed to 5.6% in April 2025, up from 5.3% in March. The biggest contributors were higher prices in restaurants and cafés, tobacco, utilities, and food items. Notably, inflationary pressure remained despite a monthly CPI decline of 0.5%, driven by falling prices for fruits, vegetables, and electricity.
Public Finances: Revenue Down, Debt Up
In December 2024, total government revenue (excluding grants) fell by 3% year-on-year, driven by a significant drop in non-tax revenue. Meanwhile, tax revenue posted a modest increase of MVR 252.6 million. On the expenditure side, total spending rose 1%, with a notable increase in recurrent expenditure offset by a reduction in capital expenditure.
The government’s total debt (excluding guaranteed debt) rose to MVR 123.9 billion by the end of Q4 2024—up 3% from the previous quarter. Public debt now stands at 114% of GDP, with the increase primarily driven by domestic borrowing.
Monetary Conditions: Credit Slows, Money Supply Grows
Reserve money (M0) declined by 1% in April 2025, reversing the 4% growth seen in March. This was largely due to a drop in net foreign assets, despite the US$400 million currency swap obtained from the Reserve Bank of India in late 2024.
Broad money (M2) grew by 7% annually, supported by increased deposits in both local and foreign currencies. Growth was fuelled by rising net domestic assets, particularly credit extended to the central government and private sector.
Private sector credit growth slowed slightly to 7% in April, compared to 8% in March. Personal loans saw the highest increase at 26%, driven by credit card and consumer durable financing. The tourism sector, which continues to account for the largest share of private credit, recorded a 4% increase—mainly for resort renovations and new developments.
Outlook
While the economy continues its recovery, challenges remain—particularly in managing inflation and sustaining fiscal health. The tourism sector, despite strong arrivals, faces pressure from shorter stays and falling occupancy. However, improved connectivity, planned infrastructure projects, and a resilient financial system are expected to support the Maldives’ economic momentum in 2025.
