The Maldives is heading towards a demographic turning point that could reshape its economy, workforce, and development priorities. While the issue of falling birth rates is a global concern, the UNFPA Maldives Population Projection 2022–2062 warns that the country’s low fertility rate could have far-reaching economic implications in the coming decades.
From Population Growth to Workforce Contraction
The Maldives’ Total Fertility Rate (TFR) peaked in 1995 at six children per woman. Since then, fertility has steadily declined, dropping to 1.8 in 2021 and further to 1.7 in the 2022 Census—well below the replacement rate of 2.1. Although the population is projected to grow until around 2050, it will begin to contract thereafter.
By 2044, the Maldives will have officially entered the stage of an aged society, and by 2052, it is projected to become a super-aged society, with nearly one in three Maldivians aged 65 or above. This shift will transform the country’s economic structure, reducing the working-age population while expanding the number of dependents reliant on state support.
Shrinking Workforce, Rising Dependency
An ageing population inevitably leads to a shrinking labour force, a key concern for a small island economy already dependent on foreign workers. The 2022 Census shows that nearly 25 percent of the resident population comprises expatriates, mainly employed in tourism, construction, and essential services.
With fewer Maldivians entering the workforce, the economy will increasingly depend on migrant labour to sustain productivity. However, reliance on a large foreign workforce poses fiscal and policy challenges, particularly as most expatriate workers remain outside the country’s social protection framework. If left unaddressed, this imbalance could strain the pension system and create gaps in productivity and tax contributions.
The government may need to reconsider its current labour and migration policies, including wage protections, skill development, and integration measures, to ensure economic stability. Policies that currently exclude migrant workers—such as the minimum wage, which applies only to Maldivians—may require revision to reflect the realities of a changing demographic structure.
Fiscal Pressure and Public Spending
The demographic shift will place immense fiscal pressure on public finances. As the elderly population grows, spending on healthcare, pensions, and welfare will rise sharply, while tax revenues are likely to decline due to a smaller working-age base.
Healthcare spending is projected to increase as chronic diseases, geriatric care, and long-term support needs expand. Social protection systems will need substantial reform to remain sustainable. Without these adjustments, the government could face widening fiscal deficits and limited capacity for growth-oriented investments.
Education and Labour Market Realignment
While ageing presents one set of challenges, the declining child population brings another. Schools in smaller islands are projected to have fewer students—some unable to fill even a single classroom. As the education sector contracts, resources may need to be reallocated to vocational training and adult reskilling programmes to sustain productivity in a smaller workforce.
Automation and digital transformation will also become increasingly vital to offset labour shortages. Investments in education technology, remote work, and high-skill training could help the Maldives maintain competitiveness as the demographic structure shifts.
International Lessons and Local Policy Implications
Globally, countries struggling with low birth rates—such as Japan, Italy, and South Korea—have experimented with various incentives, from cash bonuses to family subsidies. Taiwan, for instance, is introducing a policy in 2026 to provide USD 3,320 per newborn, with higher payouts for multiple births. However, such measures have often failed to produce lasting results without broader support systems for working parents.
In the Maldives, one major barrier to childbirth remains economic uncertainty and gendered employment conditions. Although public sector employees receive six months of maternity leave and one month of paternity leave, private sector workers—where most women are employed—are entitled to only three months of maternity leave. This discrepancy, coupled with limited childcare options, discourages many families from having more children.
To mitigate economic risks linked to declining fertility, the Maldives will need comprehensive family and labour reforms, including gender-inclusive leave policies, subsidised childcare, and incentives for flexible work arrangements.
The Road to Economic Sustainability
The next four decades will test the Maldives’ economic resilience. A smaller, older population could slow growth, challenge fiscal sustainability, and widen inequalities if left unmanaged.
However, strategic policymaking—focused on labour diversification, inclusive migration, healthcare reform, and family support—can help balance demographic realities with economic opportunity. By adapting early, the Maldives can transform its demographic challenge into a chance to build a more sustainable, innovative, and inclusive economy.
In the long term, sustaining the workforce and creating an enabling environment for both citizens and foreign workers will be essential. The demographic clock is ticking, and how the Maldives responds now will determine the shape of its economy for generations to come.
