GDP growth goes down to 3.4 percent

Maldives Monetary Authority (MMA) has said that due to the decline in the country’s economy, GDP growth went down to 3.4 percent in 2012.

The latest edition of the Monthly Economic Review published by MMA states that due to lower than expected growth in the tourism sector during 2012, GDP growth was at 3.4 percent at the end of last year which is lower than the initial projection of 5.5 percent.

The tourism sector faced decline last year with the change of government, with tourists cancelling their bookings due to boycott campaigns that followed the political turmoil. Also, despite the projection that one million tourists will visit the country by the end of the year, this target was not achieved.

However, the Economic Review states that tourist arrivals between January and November 2012 were higher than that for the same period in 2011. Tourist arrivals from Europe had gone down, but that from China had increased.

Occupancy rate during the period also recorded a decline due to the fall in tourists’ length of stay in the Maldives. Operational capacity in resorts stood at 25,628 in November 2012, of which 71 percent was occupied. Occupancy rate in November 2011, in comparison, was 80 percent. Tourist arrivals also went down by 4 percent in November 2012 when compared with November 2011.

The fisheries sector, on the other hand, improved last year. Consumption of fish products increased in October, while income from fisheries also increased.

The rate of inflation decreased by 6 percent last month. This is one of the largest drops in inflation in the past year. Inflation rate went down due to favourable changes in fish prices.

MMA has said that GDP growth for 2013 is projected at 4.3 percent, which will be “buttressed by growth of the tourism sector and related sectors such as transport, communication and wholesale and retail trade.”