World Bank in its latest Maldives Development Update (MDU) revealed that the island nation's poverty rate dropped by 7 percent in 2021.
The drop in poverty rate in the Maldives was strongly attributed to the significant recovery made by the tourism industry, and as such service exports and tourism-linked revenue collections improved in 2021.
This was reflective on the drop in the country's current account deficit and the improvement of the overall fiscal position of Maldives.
World Bank reported that all economic sectors with the exception of construction had significantly bounced back.
While poverty rate rose sharply by 11 percent in 2020 due to the Covid-19 pandemic outbreak, it was estimated to have slipped by 4 percent in 2021.
This prospective and progressive trend is expected to continue into the current year, mostly owing to the increment in the capacity of the tourism sector.
The tourism sector activities increased due to new resort openings as well as the completion of Velana International Airport's expansion project.
Additionally, the recommencement of inbound Chinese travelers to the island nation had resulted in significant improvement of the Chinese tourist market to the Maldives.
Meanwhile tourism industry along with overall economy of the Maldives are expected to make full recovery, and reach pre-pandemic levels by 2023.
Despite improvements in the tourism industry, the persisting geopolitical tension between Russia and Ukraine following the former's decision to invade the latter, arrivals from the two markets are expected to deplete in 2022 if the conflict is prolonged.
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