The Sovereign Development Fund (SDF) has recorded a notable rise in its reserves this year, with total deposits reaching USD 103.4 million, according to the Ministry of Finance and Planning’s latest Weekly Fiscal Development Report.

The figure marks a 45 percent increase compared to the USD 71.3 million accumulated during the same period last year, reflecting renewed momentum in national reserve-building efforts.

Alongside the strong performance of the SDF, the government has also intensified its debt repayment activities. Total loan repayments now stand at USD 285.3 million so far this year, up 120 percent from the USD 129.7 million spent over the same period in 2024.

The government’s focus on strengthening the SDF while accelerating debt servicing highlights a broader strategy aimed at fiscal stability and long-term economic resilience.

Established in 2016, the SDF plays a key role in supporting the Maldives’ financial sustainability. The fund is designed to meet external debt obligations, finance critical development projects, and provide a buffer against unexpected economic shocks. It operates separately from the Maldives Monetary Authority’s official reserves.

Revenue for the fund primarily comes from airport development fees charged to departing passengers, dividends from Maldives Airports Company Limited (MACL), and enhanced fees for select airport services.

The Maldives Monetary Authority’s (MMA) Quarterly Economic Bulletin for the second quarter of 2025 highlights a steady acceleration in real economic activity, underpinned by strong tourism performance and growth in construction, real estate, and fisheries.

According to the report, total tourist arrivals reached 475,708 during the quarter, representing an annual growth of 16% compared with the same period last year. By the end of June, the country had already welcomed one million visitors, marking the fastest pace ever recorded. The expansion of international flight movements, which grew by 6%, helped sustain this momentum despite the onset of the off-peak season.

Europe remained the leading regional source market, accounting for 55% of arrivals, up from 52% in Q2 2024. Asia and the Pacific contributed 34%, maintaining its share from the previous year. China consolidated its position as the top individual market, representing 14% of total arrivals, followed by Russia at 13%, the United Kingdom at 9%, Germany at 8%, India at 7%, and Italy at 6%. Arrivals from India reversed earlier declines, showing a significant recovery after consecutive downturns since 2023.

Tourist bednights increased by 5% year-on-year, supported by higher occupancy in guesthouses and resorts. Guesthouse bednights rose sharply by 28%, while resort bednights increased by 2%. The average stay length stood at 6.8 days, slightly lower than the 7.4 days recorded in Q2 2024, reflecting a modest shift in visitor patterns during the off-peak period.

The tourism sector’s strong performance continued to stimulate related industries. Construction and real estate both recorded notable expansion during the quarter. The MMA reported an 11% increase in imports of construction-related materials and a 2% annual growth in commercial bank credit to the sector. The increase in lending was largely linked to resort renovation projects, property development, and commercial building construction. Real estate activity also remained positive, with its gross value added rising by 3.7% in the first quarter, and high-frequency indicators suggesting continued strength in Q2.

Fisheries, which had experienced a decline earlier in the year, saw a sharp rebound. Fish purchases by processing companies totalled 20,832 metric tonnes in Q2, up by 101% from the same period last year. This was primarily driven by a 133% surge in skipjack tuna purchases. Although the average purchase price of skipjack tuna declined to MVR 14 per kilogram due to the move toward market-based pricing, yellowfin tuna prices rose to MVR 64.6 per kilogram, reflecting stronger export demand.

The wholesale and retail trade sector showed mixed outcomes. Imports recorded a marginal annual decline of 1%, while credit to the sector grew by 17%. The mixed performance suggests that while domestic demand remained steady, tighter financial conditions and reduced import volumes tempered overall growth in trade activity.

Overall, the MMA report indicates that the Maldives’ real economy benefited from tourism-led expansion and complementary growth in key productive sectors during the second quarter of 2025. The consistent rise in visitor numbers, coupled with renewed construction activity and recovery in fisheries, contributed to a solid foundation for the country’s medium-term growth outlook. However, the report also notes that continued diversification efforts will be essential to sustain economic resilience beyond the tourism cycle.

The Maldives Monetary Authority’s latest Quarterly Economic Bulletin shows that the domestic economy continued to grow in the second quarter of 2025, supported by robust activity in tourism, construction, and real estate. The national inflation rate decelerated to 4.6% from 5.3% in the first quarter, reflecting falling energy prices and moderating food costs.

According to the report, real GDP grew by an estimated 2.5% in the first quarter, with early indicators pointing to further improvement in the second quarter. The tourism sector remained the primary growth driver, recording a 16% increase in tourist arrivals compared to the same period last year, bringing total arrivals to nearly half a million for the quarter. By the end of June, the country had already welcomed one million visitors, the fastest pace ever recorded.

Construction and real estate also showed signs of strong expansion, buoyed by an 11% rise in imports of construction-related materials and continued investment in property development. The fisheries sector, which had contracted earlier in the year, rebounded with fish purchases more than doubling during the quarter, largely due to higher skipjack tuna volumes.

The wholesale and retail trade sector, however, recorded mixed results, with imports declining slightly by 1% while credit to the sector rose by 17%. Inflationary pressure eased, primarily due to lower electricity tariffs and fuel prices. The impact of last year’s tax changes, including higher tobacco duties, continued to be reflected in the Consumer Price Index.

On the fiscal front, government revenue rose to MVR 8.9 billion, up by nearly MVR 1.9 billion compared to the same quarter in 2024. This growth was mainly driven by tourism-related taxes, including the increase in the Tourism Goods and Services Tax, green tax, and departure tax. Expenditure, meanwhile, fell to MVR 9.2 billion, driven by reduced capital spending on infrastructure and operational cost cuts.

Broad money supply expanded by 11%, reflecting increased private sector lending and bank investments in government securities. Despite the decline in reserve money, gross international reserves rose to US$832.4 million, a 63% increase year-on-year, partly due to the US$400 million swap arrangement with the Reserve Bank of India.

The banking sector remained well-capitalised with a risk-based capital ratio of 50%, far above the minimum requirement. Profits were steady, with pre-tax earnings totalling MVR 2.2 billion. The insurance industry also recorded healthy growth, with gross written premiums increasing by 15% compared to the same period last year.

Overall, the MMA report paints a picture of steady, broad-based growth tempered by fiscal restraint and moderating inflation. With global trade conditions improving and tourist arrivals remaining strong, the outlook for the rest of 2025 appears cautiously optimistic, though risks remain from external financing pressures and global economic uncertainties.