The Ministry of Finance has reported that the construction industry in the Maldives is projected to experience significant growth over the next three years.
While the construction sector has been one of the fastest-growing industries in the Maldives, the COVID-19 pandemic had a notable impact on its performance. In 2022, the industry was expected to achieve a growth rate of 23.3%, but it only managed to grow by 11.8%. This slowdown was primarily attributed to a decrease in growth during the last quarter of the year.
The global trade in building materials and construction work also faced challenges towards the end of 2022. However, there is optimism for the construction industry in the Maldives in 2023, with growth estimates revised from 8.1% to 9.5%. This positive adjustment is attributed to the global market’s progress in overcoming supply chain challenges.
In the Fiscal Strategy Report for 2024-2026, the Ministry of Finance has outlined expectations of sustained growth in the construction industry. The average annual growth rate is forecasted to be 7.7% over the next three years.
This growth is anticipated due to government infrastructure projects, private-sector residential initiatives, and developments in the tourism sector.
Furthermore, the report has updated the Gross Domestic Product (GDP) growth projections for 2023, increasing it from 7.6% to 9.4%. In the medium term, the Ministry has adjusted the estimated annual economic growth rate from 6.3% to 6.8%.
This adjustment is primarily attributed to the expected completion of the Velana International Airport (VIA) development project in 2025, along with other airport projects, which are anticipated to stimulate tourism and various other sectors.