High international airfares push transportation costs by 9.35%

Transportation costs in the Maldives have increased by 9.35 percent, primarily driven by higher international airfares.

According to the May Consumer Price Index (CPI) report published by the Maldives Bureau of Statistics, which tracks changes in household expenditure, the overall inflation rate across all CPI categories rose by 2.54 percent compared with May last year.

Among all CPI categories, transportation recorded the largest annual increase. Compared with May 2024, transportation costs rose by 9.35 percent, while prices increased by 1.12 percent between April and May this year.

The Statistics Bureau attributed the increase mainly to a 17.75 percent rise in international airfares and a 1.08 percent increase in sea transportation costs.

Prices of essential goods also recorded a notable increase in May. Overall prices for essential commodities rose by 6.63 percent compared with the same month last year, with gas and fuel prices recording the sharpest increase at 19.9 percent.

Food prices also rose by 6.51 percent year-on-year, while beverage prices increased by 5.15 percent.

The Maldives faces debt repayment obligations totaling USD 1.1 billion this year, of which USD 524.68 million was repaid in April. The World Bank projected last year that these repayments would place pressure on foreign exchange reserves, contributing to higher commodity prices throughout this year.

The World Bank also projected that regional conflicts, particularly those involving Iran, would weigh on tourism while increasing import costs, ultimately affecting the country's national income.

Similarly, the Asian Development Bank (ADB) has forecast that continued instability in the Middle East will keep prices elevated in the Maldives for the remainder of the year.

The escalation of tensions in the Middle East beginning in late February significantly disrupted regional air travel. Several key flight routes used by tourists travelling to the Maldives were closed, adversely affecting the country's tourism revenue.

The continued conflict in the region has prolonged disruptions to international air travel, contributing to the sustained increase in transportation costs.