MMA Report Shows Easing Inflation, But Food and Dining Costs Still Rising

The Maldives recorded an inflation rate of 3.8 percent in June 2025, a notable drop from 4.6 percent the previous month, according to the latest Economic Update from the Maldives Monetary Authority (MMA). While the headline figure indicates a cooling trend, the underlying data points to sustained cost pressures in key areas of daily spending.

The largest contributors to annual inflation were tobacco and dining out. Together, tobacco and services at restaurants and cafés accounted for over 3.5 percentage points of the total rate, underscoring how policy-driven price hikes and consumer demand in hospitality continue to shape the inflation landscape.

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Food categories such as fruits, fish, and dairy also contributed to inflation, though at lower levels. Fruits alone added 0.53 percentage points, while fish prices contributed 0.32 points. This comes despite a fall in vegetable prices, which slightly offset the overall food-related increase.

On the other hand, declines in prices of electricity, mobile phone equipment, and communication services provided downward pressure. Electricity alone brought inflation down by 0.86 percentage points in June, followed by mobile communication services at -0.27 points.

Month-on-month inflation also showed signs of easing, with the Consumer Price Index falling slightly after a 0.5 percent increase in May. While prices for fish and electricity continued to decline, modest increases were recorded in fruits, dairy products, and mobile services.

The drop in inflation suggests that supply-side pressures are beginning to ease, particularly in energy and telecom sectors. However, the cost of essentials such as food and dining continues to weigh on household budgets. With inflation still above the 3 percent mark, the impact on lower-income households remains a concern, especially amid broader shifts in consumption and service demand.

As the MMA and other policymakers monitor economic stability, the persistence of price pressure in key categories may inform future fiscal and monetary policy decisions. In the meantime, households will likely continue to feel the pinch from rising everyday costs, even as the overall inflation rate moves in a more favourable direction.

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