MMA forecasts GDP growth decline

Maldives Monetary Authority (MMAP) has projected that compared with last year, the Gross Domestic Product (GDP) growth of Maldives for this year will go down.

MMA’s Monthly Economic Review for July 2012 shows that real GDP growth was at 7.5 percent in 2011, while it is estimated to be at 5.5 percent in 2012.

GDP is a measure of economic growth of countries.

While 28 percent of the GDP is contributed by the tourism sector, tourist arrivals declined during June 2012 due to the low season of the tourism sector.

Moreover, the length of the average tourist stay, operational capacity, and the occupancy rate of the sector also recorded an overall decline during June.

On the other hand, the second largest industry, fisheries, improved over the past two months, with increases especially in fish export volumes and earnings.

MMA projects that the government budget deficit will widen to be about 10 percent of the GDP.

The report noted that as indicated by the current trends in government expenditure and revenue, the overall government budget deficit might be higher than this by the end of the year.

The rate of inflation has also increased over the past month in the Maldives, in spite of IMF’s indication that world food and oil prices are declining.