Maldives economy expects strong recovery in 2023; projects World Bank

According to the latest regional economic update of World Bank, the Maldives expects its real GDP to grow by 8.5 percent by 2022 end, and reach 9.1 percent in 2023.

The island nation has shown strong economic recovery due to the positive recovery made in tourism sector in 2021.

The survey claimed that the reason for the significant bump in tourism sector activities can be attributed to the successful vaccination programs held in the island nation.

Moreover, World Bank also noted that tourist arrivals were catching up to pre-pandemic levels in the second half of 2021, but were still 22 percent below 2019 levels at year-end.

However, tourism receipts had almost reached pre-pandemic levels mainly due to tourists booking longer stays during the pandemic.

While Maldives held a headline inflation of 1 percent since mid-2021, the edible oils indicated a 10 percent rise in January 2022 compared to 2.9 percent back in 2021.

World Bank remarked that high inflation was driven by a "combination of rising prices of edible oil imports" and rising demands.

Meanwhile, growth in South Asia's overall GDP "will resume roughly to pre-COVID levels" going forward. The overall GDP of the region is expected to grow by 6.6 percent in 2022 and another 6.3 percent in 2023.

The real GDP of Maldives at constant market prices is currently at 7.6 percent and is expected to hike to 10.2 percent sometime in 2023.

On the other hand, the real GDP of the island nation will grow by 8.5 percent by the end of 2022 and by another 9.1 percent by 2023.

Furthermore, World Bank claims that the prospects for GDP growth in the Maldives were even higher but the "abrupt decline of visitor arrivals from Russia and Ukraine will dampen the momentum."

Regardless of the expected dampening, the resumption of Indian arrivals as flights resume direct operations, will "partially help fill the void left by the decline" in Russian and Ukrainian arrivals in February 2022.

The report also projected that the tourist arrivals from China may resume to pre-COVID levels in 2023.