World Bank has revised and reduced the economic growth project for the Maldives in light of new data.
The bank in its South Asian Development Update (SADU) highlighted tourists visiting Maldives are now opting more for lower-cost guesthouses instead of luxury and expensive resorts.
Although tourism industry businesses report tourist arrival increment, they have observed the shift in traveler trend as guests opt cheaper tourism accommodations; especially post the Covid-19 pandemic in 2020.
World Bank also projected an output growth of 4.7% for the Maldives, a reduction from the previous 5.2%.
The bank further said the economic condition became prevalent last year when the Q3-2023 economic growth stood at 2% in comparison to 13.9% in the corresponding quarter of 2022.
World Bank projected a 5.2% economic growth bump once Velana International Airport’s expansion concludes, which would increase tourist arrivals in annual terms. The bank however, highlighted Maldives was still exposed to prospective risks owing to higher public spending and debt accumulation; which in turn would push the state deficit up.