The World Bank says the Maldives is expected to remain the fastest-growing economy in the region, benefiting from an increase in tourist arrivals and infrastructure investments.
In its Global Economic prospects, the World Bank said that tourism in Maldives rebounded robustly in 2022, returning its GDP to its pre-pandemic level more quickly than previously expected and that growth for the year is expected to be 12.4 percent.
As for the 2023 forecast, the World Bank said that the Maldivian economy is expected to reach 8.2 percent in 2023 and decline to 8.1 percent in 2024.
The Bank said that Rising interest rates will squeeze non-interest spending in small states with sizeable existing stocks of variable-rate debt, such as Fiji and Maldives.
It said that borrowing from China represents another distinct debt repayment risk for the Maldives. The Bank said that while the data was incomplete, the Maldives is among the 20 countries with the highest estimated stocks of debt owed to entities in China as a share of their GDP.
As for the South Asian region, World Bank said it is projected to slow to 5.5 percent in 2023 on slowing external demand and tightening financial conditions before picking up slightly to 5.8 percent in 2024 (table 2.5.1).
It said that growth is revised lower over the forecast horizon and is below the region’s 2000-19 average growth of 6.5 percent. It added that this space reflects still robust growth in India, Maldives, and Nepal offsetting the effects of the floods in Pakistan and the economic and political crises in Afghanistan and Sri Lanka. The deteriorating global environment, however, will weigh on investment in the region
