Maldives registers 7% decline in international reserves in October

A person enters the Maldives Monetary Authority (MMA) headquarters in Male' City on September 7, 2021. (Sun Photo/Fayaz Moosa)

Maldives registered a 7 percent decline in its gross international reserves at the end of October. 

According to the latest economic update released by Maldives Monetary Authority (MMA), Maldives had USD 1 billion in its gross international reserves at the September. 

The figure dropped by seven percent to USD 947.6 million at the end of October 2021. 

Though the gross international reserves declined by seven percent when compared to September 2021, it was a 49 percent increase compared to the USD 638.1 million in gross international reserves in October 2020. 

Meanwhile, total expenditure (excluding amortization) rose by 18 percent to MVR 432.7 million in September 2021 when compared with September 2020, mainly due to an increase in capital expenditure, which posted an increment of MVR 266.4 million, while recurrent expenditure increased by MVR 166.3 million. 

According to the advance estimates of the Quarterly National Accounts for Q2 2021 released by the Maldives Bureau of Statistics, real GDP rebounded strongly by 75.3 percent in Q2 2021, compared to Q2 2020, following a decline of 10.1 percent in Q1 2021.  

Despite the strong rebound in growth, GDP remains 15.9 percent below pre-pandemic levels in Q2 2019. 

MMA attributed the strong rebound in the annual GDP growth during Q2 2021, to a significant pick-up in tourism sector, largely mirroring the base effect of the decline in the sector, following the closure of international borders in Q2 2020. 

MMA said that the real GDP is projected to grow in the range 28.1 percent and 38.5 percent in 2021, with the most likely growth rate as 31.6 percent for 2021. Going forward, real GDP is projected to grow by 12 percent in 2022. 

The fast economic recovery prompted international credit rating agency Fitch to upgrade Maldives’ credit rating from ‘CCC’ to ‘B-’ in October.