Maldives economy contracted by 12.3 percent in the second quarter of this year compared with the previous quarter, according to the National Bureau of Statistics.

The country’s gross domestic product (GDP) stood at MVR25 billion in the second quarter, down MVR3.5 billion from MVR28.5 billion in the first quarter.

Despite the quarterly contraction, the economy grew by 1.3 percent in the second quarter compared with the same period last year.

The year-on-year growth was driven mainly by expansion in the financial and construction sectors.

However, the tourism sector recorded a sharp decline in the second quarter, contracting by 34 percent compared with the same period last year. The decline was attributed to the impact of the conflict in the Middle East.

Tourist arrivals have also declined compared with last year. According to the Tourism Ministry, arrivals are currently 3.9 percent lower than during the same period last year.

A total of 1.5 million tourists have visited the Maldives so far this year.