The government of Maldives has decided to subsidise electricity and water bills for the next two months in order to help the public with the financial difficulties caused by the COVID-19 pandemic.
Minister of Finance Ibrahim Ameer announced 40% of all electricity bills of April and May will be subsidised, while 30% of all water bills during the period will be subsidised. He revealed USD 19.5 million has been allocated for the subsidies.
The finance minister further stated the COVID-19 pandemic has badly affected the global economy. He also said the 30-day State of Public Health Emergency in Maldives is expected to cause major losses to the local economy, adding the economy could fall to a vulnerable situation.
Following the global outbreak of COVID-19, tourist arrivals in Maldives have significantly decreased. During the first 15 days of March, 57,795 tourist arrivals were recorded in Maldives which is a 34.7% decrease compared to the same period last year. There were 339,362-bed night bookings between January 26 and March 13, while 198,120 booking cancellations were recorded during the period.
While 1.86 million tourists were originally expected to arrive in Maldives this year, new estimates reveal the figure could fall by 12% to 35% (between 1.10 million and 1.53 million tourist arrivals) due to the COVID-19 pandemic. Bed nights are expected to fall by 8% to 21%, while the Gross Domestic Product (GDP) growth is expected to be between 0.5% and -5.6% compared to the initial estimate of 7.5%.
Amid the impending economic and financial crisis, the finance minister stated it is important that businesses make good use of the working capital assistance provided by the government and to ensure jobs are not decreased. He said protecting the jobs will reduce the negative impact on consumption and help to overcome the economic difficulties faced by the country.