The World Bank has predicted that the Maldives economy will increase between 7.9 to 8.5 percent in the upcoming year.
The latest 'World Bank Maldives Development Update' report published by the bank said the economic impact of the COVID-19 pandemic is expected to be profound this year, and that the real GDP is expected to contract by between 13 and 17.5 percent in 2020. This figure is 18.5 percentage points lower than the pre-COVID-19 baseline. However, the Maldives is expected to make a slow but steady recovery, and the World Bank projects a GDP growth between 7.9 and 8.5 percent in 2021 as tourism gradually resumes.
The World Bank said the bank is ready to invest in the renewable energy sector when the archipelago begins to rebuild its economy once again after the COVID-19 pandemic. The bank recently contributed US$ 12.8 million towards the income support package introduced by the Maldives government.
The bank acknowledged that the government has introduced a series of fiscal and monetary measures to mitigate the losses caused by the current financial crisis, and highlighted some of the steps taken by the government
Idah Z. Pswarayi-Riddihough, World Bank Country Director for Maldives, Nepal, and Sri Lanka said the Maldives has enjoyed high growth rates in the past few years, but that the shocks stemming from the COVID-19 pandemic have upended the Maldives development trajectory and severely affected the Maldivian people/ Focusing on renewable energy can prove to be a good investment at this time, she added.
The Maldives government hopes to resume tourism in the popular island destination in July. However, a decline of 50% is expected in tourist arrivals, and expected revenue received is estimated to decline by MVR 14 billion.
