The Maldives Monetary Authority (MMA) has revealed that the Maldivian economy expanded by 13.9% in 2022.
In the annual report, MMA stated that according to preliminary estimates based on the Quarterly National Accounts (QNA) released in early April 2023, the Maldivian economy is estimated to have expanded by 13.9% in 2022 and exceeded pre-pandemic level, after registering a growth of 41.7% in 2021. It stated that the robustness in growth during 2022 was driven by the buoyant tourism sector owing to the pent-up demand from traditional source markets of Europe as well as key Asian source markets, despite the strong headwinds from geopolitical and economic uncertainties as well as from China’s zero-COVID-19 policy.
Additionally, the domestic economy benefited from the easing of global travel restrictions and improvement in the flight operational capacity with the opening of the new runway in the Velana International Airport (VIA) in October 2022. Meanwhile, activity in sectors closely related to tourism such as transportation and communication as well as wholesale and retail trade also strengthened during the year. Similarly, the growth of the construction sector and fisheries sector accelerated, owing to an increase in construction activity and estimated fish catch, respectively, during the year.
In the report, MMA stated that the tourism sector grew in 2022, despite strong headwinds from geopolitical and economic uncertainties as well as from China’s zero-COVID-19 policy. As such, the total tourist arrivals for the year surpassed the government’s target of 1.6 million tourists for the year, reaching a total of 1,675,303 arrivals in 2022. The total tourist arrivals rose by 27% when compared with 2021, although a 2% decline was observed when compared to 2019. The increase in arrivals primarily reflected the pent-up demand from traditional source markets of Europe as well as key Asian source markets.
Furthermore, the fisheries sector is estimated to have improved by 3.1% in 2022, after registering a decline of 2.4% in 2021. It mainly reflected the estimated growth in the fish caught during the year, although fish purchases by the fish processing companies registered a decline, primarily reflecting domestic factors. The report also shows that the construction sector is estimated to have increased by 18.3% during the year, although it continued to remain significantly below pre-pandemic levels. In 2022, the substantial expansion in construction activity reflected the easing of supply chain disruptions during the latter half of the year, as indicated by the significant growth in construction-related imports, which registered an annual growth of 47%, after recording a growth of 6% during the preceding year.