Maldives Monetary Authority: growth in tourism and construction expected in 2016

Male Featured ImageThe National Bureau of Statistics’ October estimates indicate that real GDP growth for 2015 is expected to slow down to 4.8 per cent from 6.5 per cent in 2014, according to the Maldives Monetary Authority’s (MMA) Monthly Economic Review. This figure is 5.7 per cent lower than forecasts made in October 2014, largely due to a slower than expected growth of the tourism sector.

Growth is expected to pick up in 2016 to 6.4 per cent, driven by construction sector growth from large infrastructure projects planned for the year. The tourism sector is expected to improve as well, boosting overall economic growth.

During October total tourist arrivals rose by 10 per cent in monthly terms while registering a 4 per cent annual decline and totalled 105,498. The annual decline in arrivals was precipitated by a fall in visitors from China and the Middle East. Total bednights for the month registered a decline of 8 per cent in annual terms mainly due to the decline in average duration of stay from 6.0 to 5.8 days. Partly reflecting this, the occupancy rates in October 2015 fell to 71 per cent, down from 80 per cent in the same period last year.

In September 2015, the volume of fish exports registered an 8% decline in annual terms while earnings on fish exports fell by 22%. The annual decline in the volume and earnings on fish exports was mainly due to a fall in the volume and earnings on fresh, chilled and frozen yellowfin tuna exports.

The rate of inflation slightly decelerated to 1.4% at the end of September 2015 from 1.5% in August 2015. This was mainly due to a fall in fish prices and also due to a slower growth in prices charged for housing rent.

At the end of October 2015, gross international reserves registered a decline of 9% in monthly terms and rose by 3% on annual terms and stood at US$569.9 million. Of this, usable reserves amounted to US$200.1 million. During the review month, usable reserves registered a decline of 6% in monthly terms while it increased by 38% in annual terms.

Mirroring the movements of the US dollar during October 2015, the bilateral exchange rates of the rufiyaa appreciated in annual terms against the Singapore dollar, the Indian rupee, the Sri Lankan rupee, the sterling pound and the euro. As for the monthly changes, the rufi yaa appreciated against the Indian rupee and the euro, while it depreciated against the Singapore dollar and the sterling pound. Meanwhile, the rufiyaa remained largely unchanged against the Sri Lankan rupee.