The Maldives Monetary Authority (MMA) has released its comprehensive Quarterly Business Survey for the fourth quarter of 2023, providing critical insights into the nation’s economic landscape. The survey, which ran from 25 December 2023 to 10 January 2024, paints a varied picture across different sectors.
The period saw an expansion in most business sectors, with the striking exceptions of the wholesale and retail trade sector and the construction sector. The former reported a contraction in activity, while the latter experienced a moderation in the review quarter.
Employment trends varied across sectors. The tourism sector, a linchpin of the Maldivian economy, reported an increase in employment levels. In contrast, both the construction sector and the transportation and communication sector witnessed a slowing pace in new hires compared to the previous quarter. The wholesale and retail trade sector saw a decline in employment, in line with its overall contraction.
Businesses in the tourism sector, buoyed by an extended peak season, maintain a positive outlook for future activity, though they anticipate a moderation moving forward. Overall, across all sectors, there is a sense of optimism regarding future business activities. The wholesale and retail trade sector is particularly hopeful of improvement, while other sectors brace for a moderated performance in Q1 2024.
The end of 2023 witnessed increased price pressures in all sectors. The tourism sector reported the most significant rise in both selling and input prices. However, price pressure in this sector is expected to ease, reflecting anticipated lower demand in Q1 2024. The construction sector, on the other hand, expects continued intensification of price pressures. The transportation and communication sector predicts mixed developments, with rising input costs but decreasing selling prices. Businesses in the wholesale and retail trade sector foresee a decrease in price pressures in the upcoming quarter.
The financial situation improved for businesses in most sectors, except for the construction, transportation, and communication sectors. Looking forward, all sectors, barring the wholesale and retail trade and transportation and communication sectors, anticipate further improvements. However, the latter two expect a continued deterioration in their financial situation.
In Q4 2023, credit access remained tight across all sectors. The tourism, transportation, and communication sectors expect even tighter credit conditions going forward. Conversely, the construction, wholesale, and retail trade sectors are more optimistic, expecting less constrained credit access in the next quarter.
The MMA’s Quarterly Business Survey highlights the diverse and dynamic nature of the Maldivian economy, revealing sector-specific challenges and opportunities as the nation navigates through changing economic tides.