Commodity prices in the Maldives could rise by as much as 6 percent as a result of the ongoing conflict in the Middle East, according to a new report by the World Bank.

The report says rising global commodity prices are expected to drive higher inflation in the Maldives, with households in the atolls likely to be the most affected.

However, it notes that government subsidies aimed at controlling the cost of essential goods are helping to mitigate some of the impact.

According to the World Bank, inflation is expected to remain above 4 percent this year and through 2028. The report warns that higher prices will increase the country's foreign currency requirements for imports and place additional pressure on foreign exchange reserves.

World Bank noted that food, meat and tobacco prices recorded significant increases over the past year, contributing to rising living costs.

It said continued price increases are likely to affect household finances across the country. As an import-dependent economy, the Maldives remains particularly vulnerable to global inflationary pressures and disruptions linked to geopolitical conflicts.

Food prices are projected to rise by around 10 percent, while the poverty rate is expected to increase to 1.6 percent, according to the report.

World Bank also revised its economic outlook for Maldives, forecasting growth of 0.7 percent this year, compared with 6.3 percent growth recorded last year.

The slowdown is attributed largely to weaker performance in the tourism sector, which has been affected by the impact of the conflict on global travel and economic conditions.

Despite the weaker outlook for 2026, the World Bank expects the Maldivian economy to recover in 2027, forecasting growth of 6.7 percent as tourism rebounds and visitor arrivals increase.