Maldives records GDP loss of 51 percent in second quarter

The National Bureau of Statistics (NBS) revealed that Maldives experienced a 51.6 percent decrease in GDP during the second quarter of 2020 compared to the same period in 2020.

According to the quarterly figures published by NBS, GDP figures for the period contracted by 54 percent compared to the first quarter of 2020.

The substantial decrease was attributed to the travel restrictions introduced in response to the COVID-19 pandemic, which brought the Maldivian tourism industry to a standstill from March 27 to July 15.

While the GDP contribution of the tourism fell by 25.5 percent, decreases were subsequently recorded for several other sectors including a 6.8 percent drop in transportation and communication as well as a 4 percent contraction in the wholesale and retail trade sector.

Substantial impacts on the tourism sector

Overall, the Maldivian tourism industry experienced a 98 percent decline compared to the second quarter of 2019.

In comparison to the first quarter of 2020, the same figure reaches 98.2 percent.

Furthermore, the number of tourist bed nights fell by 2.7 million compared to the fourth financial quarter of 2019

The aforementioned contraction was recorded after the tourism industry had secured steady gains in 2017 and 2018, with figures of 10.3 percent and 9.8 percent respectively, which followed a reduction in 2015.

The restrictions on international travel left Maldives' heavily tourism reliant economy in an extremely vulnerable state. In mid-April, the World Bank projected that Maldives would be the worst-hit economy in the South Asian region due to the pandemic.

Despite the lifting of restrictions, Maldives has noted a significant reduction in tourist arrivals compared to pre-COVID figures, with only a total of 13,516 tourists arriving in Maldives between July 15 and September 15, as per Maldives Immigration.

However, Minister of Tourism Dr Abdulla Mausoom has stated that the government is expecting an additional 100,000 tourist arrivals before year-end.

Overall, the Maldivian government estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency and a state deficit of MVR 13 billion in 2020 as a result of the COVID-19 pandemic's impact on the tourism industry.