World Bank: Maldivian economy expected to grow by 22.3 percent in 2021

An aerial shot of Male' City. (Sun Photo/Fayaz Moosa)

The World Bank has projected that the Maldivian economy will grow by 22.3 percent this year.

In the World Bank’s twice-yearly regional update report titled ‘Shifting Gears: Digitization and Services-Led Development’ – it was noted that the Maldivian economy continues to recover subsequent to the rebound of its tourism industry as well as the targeted containment measures that had helped minimize the economic impacts of the later waves of COVID-19 in the country.

The report projects the Maldivian economy to grow by 22.3 percent in 2021 – largely reflecting on base effects. The report projects economy to grow by 11 percent in 2022.

Forecasts for this year is on the presumption that the Maldivian borders will remain fully open for the rest of the year – with at least 1.1 million tourist arrivals; double the number of arrivals recorded last year. It was noted in the report that tourist arrivals are expected to pick up steady as global travel normalizes.

Subsequently, the report said that real GDP is expected to recover to pre-pandemic levels by 2023.

In addition to this, the report projects the poverty rate in the Maldives would decline by 9.1 percent in 2021 – and then by 4.3 percent by 2023.

Country Director of the World Bank for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos, commented in the report that Maldives in well on track to recover from the pandemic. However, he added that to build back better, the country would need to focus on fiscal prudence to address debt vulnerability, economic diversification, and human capital investment.

In the report, World Bank also commended the acceleration of digital transformation in the Maldives which was field, attributing the achievement to relatively high broadband and mobile internet services provided in the country. To this note, it was said that about 63 percent of the Maldivian population used internet in 2019 – which is a higher proportion than in other South Asian countries and peers outside the region.

The report also recommended leveraging the digital dividend by addressing policy, legal, and regulatory gaps that currently inhibit the adoption of digital technologies. It was also recommended that the country boosts its digital capabilities and skills to ensure that its citizens can take advantage of new technologies in an increasingly digital world.