Maldives Economic Growth Shows Signs of Slowdown in March
The latest real GDP data for March reveals a 3.6% decline from February, sparking concerns about the country's growth trajectory. Is the Maldivian economy hitting a speed bump?
The Maldivian economy experienced a slowdown in March 2025, with real Gross Domestic Product (GDP) declining by 3.6% compared to the previous month, according to the latest data from the Maldives Bureau of Statistics. This is a significant shift from the growth seen in preceding months and raises questions about the economic trajectory for the remainder of the year.
Despite the monthly dip, the nation's real GDP for March 2025 stood at MVR 8.8 billion, reflecting a modest 0.4% increase when compared to the same month in 2024. Cumulatively, the total real GDP for the first quarter of 2025 reached MVR 27.6 billion, a 1.6% rise over the first quarter of the previous year. Furthermore, the annual real GDP for 2024 was estimated at MVR 101.8 billion, a 5.1% increase from 2023.
A sectoral analysis for March 2025 reveals a mixed performance. The public administration sector was the primary driver of growth, contributing 1.4%, followed by real estate activities at 0.8% and human health and social work at 0.4%.
However, several key sectors contracted, contributing to the overall monthly decline. The fisheries sector saw the most significant negative impact, with a contribution of -1.3%. Construction and manufacturing also dragged on growth, each contributing -0.3%.
The vital tourism (accommodation and food services sector), which accounts for the largest share of the economy at 24.1%, also experienced a downturn. The Gross Value Added (GVA) for this sector in March 2025 was MVR 2,143 million, a decrease of 1.0% from February 2025 and a 4.6% drop compared to March 2024. This decline is primarily linked to a reduction in the number of tourist bed nights recorded for the month.
In contrast, the transportation and communication sector showed resilience, with its GVA growing by 0.6% compared to March 2024 and 0.3% from the preceding month. Financial services also posted positive growth, expanding by 2.9% year-over-year and 2.2% month-over-month.
The construction sector's GVA for March 2025 was MVR 294 million, a steep 30.3% fall from February 2025 and a 9.5% decline from the corresponding month in the previous year. This downturn is attributed to a decrease in the import of building materials.
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