Maldives economic growth stable at 5.5% in 2020


Image: Mihaaru

The World Bank estimates the economic growth of Maldives in 2020 will be stable at 5.5%.

The twice-every year publication of Global Economic Projections by the bank notes the economic growth of the island nation slowed down during 2019.

In its report, the bank further explained the overall economic growth declined despite significant improvement in tourism industry, due to major development projects winding down.

The World Bank and even the Maldives Ministry of Finance had estimated the country’s Gross Domestic Product (GDP) for 2019 will be balanced at 5.2%, which was a drop from previous forecasts.

While the bank estimates the economic growth will be maintained at 5.5% for the current year, the bank further claims economic growth will be balanced between 5.6% for the succeeding two years as well.

Although the projection from the bank puts economic growth at 5.5%, the estimates from both Ministry of Finance and Maldives Monetary Authority (MMA) – the central bank of the country – Maldives is expected to perform significantly better in 2020.

According to both of these local institutions, the economic growth rate will increase to 7.5% and maintain the position throughout the year.

The 2020 state budget, presented by Ministry of Finance, and approved by Maldives Parliament notes the tourism industry will continue to perform stronger.

According to the 2020 state budget’s details, tourism industry’s growth for the year will increase by 2.6% reaching stability.

Furthermore, the budget’s details confirm the prime reason for drop in last year’s economic growth; construction industry, will increase in business activity and increase industry growth by 1.1%.

Other economic sectors are expected to perform strongly as well, with a national productivity rate of 3.8% as per Ministry of Finance.