Maldives economy contracts 12.3% in Q2 as tourism slowdown hits GDP

Maldives’s economy contracted 12.3 percent in the second quarter of 2026 compared to the first quarter, according to the latest Quarterly National Accounts released by the Maldives Bureau of Statistics (MBS).  

Real GDP stood at MVR 25.1 billion in 2026 Q2, a decline of MVR 3.5 billion from MVR 28.7 billion in the previous quarter. This marks the sharpest quarter-on-quarter contraction since the national accounts were rebased to 2019.

However, compared to the same period last year, real GDP recorded a marginal 0.03 percent growth, equal to MVR 7.3 million.

The downturn was driven primarily by a slowdown in the accommodation and food services sector, the backbone of the Maldivian economy. The sector’s gross value added (GVA) fell 34.1 percent compared to the previous quarter and 14.3 percent year-on-year, dropping to MVR 4.6 billion.  

MBS attributed the decline to a steep fall in tourist bed-nights, 1.6 million fewer than in the first quarter, and 425,385 fewer compared to 2025 Q2. Despite this, accommodation and food services still accounted for the largest share of real GDP at 18.1 percent.

The transportation and communication sector also contracted, falling 16.8 percent quarter-on-quarter and 1.2 percent year-on-year, reflecting reduced transport activity and warehousing services.

Several sectors, however, posted strong gains.  

• Construction grew 19.1 percent over the previous quarter and 33.7 percent year-on-year.  

• Financial services expanded 21.7 percent year-on-year.  

• Wholesale and retail trade grew 14.4 percent year-on-year.

The fisheries sector recorded the steepest annual decline, with GVA falling 50.8 percent compared to 2025 Q2. The sector grew slightly (2.1 percent) compared to the previous quarter.

In nominal terms, GDP for 2026 Q2 stood at MVR 29.1 billion, an increase of MVR 1.3 billion compared to the same quarter last year, but a 17.4 percent decline compared to 2026 Q1.

The implicit price deflator, which measures overall price changes in the economy, rose 4.6 percent year-on-year.

MBS will release the third-quarter results on December 31, 2026.