GDP drops, inflation rises in Q1

Records released by Maldives Monetary Authority (MMA) shows a decline in economic activity marked by a drop in Gross Domestic Product (GDP), as well as a rise in inflation during the first quarter of the business year in Maldives.

The quarterly economic bulletin released by MMA on Sunday shows the GDP growth rate had been at 3.1 percent in Q1 of 2018. Though the rate rose to 4.8 percent in Q4 of 2018, it dropped back to 3.1 percent in Q1 of this year.

MMA has noted a general decline in economic activity despite the growth in the tourism sector earlier this year.

The drop in GDP has been attributed to a decline in the construction sector, as well as wholesale and retail sector.

The quarterly economic bulletin shows the tourism sector to maintain its record as the highest contributor to the GDP. It made up for 27.9 percent of the total GDP, followed by a 13.1 percent contribution by the transport and communications sector.

BIGGEST CONTRIBUTORS TO GDP IN Q1:

• Tourism sector: 27.9 percent
• Transport and communications sector: 13.1 percent
• Wholesale and retail sector: 8. 1 percent
• Public administration: 6.7 percent
• Construction sector: 5.1 percent

The fisheries sector topped the list as the best performing sector based on growth rate with a jump from a 11. 8 percent growth rate in Q4 of 2018 to a 16.9 percent growth rate in Q1 of this year.

It was followed by a 9.5 percent growth rate in water and sanitation sector, and a 9.1 percent growth rate in the tourism sector.

A RISE IN INFLATION

MMA reports the inflation rate rose by 0.03 percent in the first half of this year. The inflation rate had been at -0.4 percent in Q4 of 2018, but had risen to 0.7 percent in Q2 alone.

It notes that the rise in inflation had followed a low inflation rate throughout 2018.

The rise in inflation has been attributed to a rise in cost of housing, fruits, healthcare services, and dental care services.