Maldives Development Update, April 2014
Real GDP growth in Maldives stood at 3.7 percent in 2013 and its outlook is positive at 4.5 percent for 2014. The tourism demand is slowly picking up and has a positive impact on growth in the non- tourism sectors. Chinese tourists continue to comp...
| Main Authors: | , , , |
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| Format: | Economic Updates and Modeling |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/04/19402100/maldives-development-update http://hdl.handle.net/10986/18654 |
| Summary: | Real GDP growth in Maldives stood at 3.7
percent in 2013 and its outlook is positive at 4.5 percent
for 2014. The tourism demand is slowly picking up and has a
positive impact on growth in the non- tourism sectors.
Chinese tourists continue to compensate for the weaker
demand from Europe, but overall the length of stay has
declined, as well as spending per tourist. Growth while
dynamic was less inclusive, as the tourism industry is
operating on an enclave model of development. The share of
GDP from the primary sector, agriculture, mining and
fisheries that employ the largest share of Maldivians in the
outer atolls, was less than 0.3 percent of GDP in 2013.
Loose fiscal policy in a context of moderating economic
growth has led to rising macroeconomic imbalances. While
revenue collection has been strong, over the past five years
the gap between revenues and expenditures has widened,
financed through unsustainable levels of public debt at
increasing interest rates. The 2014 Budget comes with a
record high envelope of MVR 17.95 billion (around 50 percent
of GDP), about MVR 3 billion in new revenue measures, and an
estimated 3.2 percent financing gap. Financing such high
level of spending and meeting this ambitious financing gap
would be difficult. Cash management will be tight through
2014. Inflation moderated to 6 percent in 2013 in 2013
although food inflation remained high. |
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