The World Bank has reported the recovery prospects of the Maldivian economy have improved with the boost in tourist arrivals to the country.
The latest economic update report by the World Bank stated the Maldives’ recovery from the COVID-19 pandemic continues as tourism rebounded and targeted containment measures helped minimise the economic impacts of the recent waves of COVID-19. However, it noted the recovery remains fragile and uneven, adding the Maldives, like many countries, is far from pre-pandemic trend levels.
The report further stated the latest South Asia Economic Focus had projected the Maldives’ economy to grow by 22.3% in 2021, largely reflecting base effects, and by 11% in 2022. It noted this forecast assumes that borders remain fully open with at least 1.1 million tourists expected to visit the country in 2021, double the amount recorded in 2020, and 65% of 2019 levels. The report added arrivals are expected to pick up steadily as global travel normalises, driving real GDP to recover to 2019 levels by 2023. The report also noted the poverty rate is expected to decline to 9.1% in 2021 and subsequently to 4.3% by 2023.
The World Bank report stated the COVID-19 pandemic has accelerated the digital transformation that was already underway in the Maldives, thanks to relatively high broadband and mobile internet penetration in the country. As such, the report noted about 63% of the population used internet in 2019, a higher proportion than in other South Asian countries and peers outside the region.
The World Bank called on the Maldives to address policy, legal, and regulatory gaps that currently inhibit the adoption of digital technologies, to leverage the digital dividend. The report added the Maldives also needs to boost digital capabilities and skills to ensure that all Maldivians can take advantage of new technologies in an increasingly digital world.