Economic growth tied to opening of new VIA terminal

World Bank has stated that Maldives' economic growth this year will largely depend on the completion and commencement of services at Velana International Airport’s (VIA) new terminal.

In its latest development update released this month, World Bank noted that the tourism boom experienced late last year has continued into 2025. World Bank expects the new terminal to be completed by mid-year, projecting that it will help sustain the momentum in tourism.

According to the report, productivity is forecasted to grow by 5.7 percent this year, 5.3 percent in 2026, and 4.7 percent in 2027. These growth figures are higher than the Bank’s earlier projections made in September last year, driven by a stronger than expected performance in the tourism sector.

However, the World Bank also flagged several economic challenges.

Inflation is expected to rise from 1.4 percent last year to 4.3 percent this year. Government debt, as a percentage of GDP, is forecasted to climb from 134.2 percent to 135.7 percent by 2027.

Meanwhile, external debt is projected to rise to USD 1 billion this year, compared to USD 424.3 million last year.

The report highlights the importance of the government’s economic reform agenda in addressing these challenges. It highlighted last year’s fiscal measures, including changes in the Tourism Goods and Services Tax (TGST) and the airport development fee, and called for faster implementation of subsidy reforms and efforts to reduce state expenditure.

The government aims to complete the new VIA terminal by October this year.

Once operational, the terminal is expected to accommodate up to 7.5 million passengers annually.