One of the biggest fears that the Maldivian economy faced due to the pandemic was the fear of an economic crash due to the negative effects COVID-19 will have on the Maldivian economy. As a country that heavily depends on the tourism industry for revenues and livelihood of the citizens, the COVID-19 lockdown was extremely hard on the Maldives. However, the country managed to be one of the few countries that used proper strategies and reduced the impact of the lockdown on tourism industry.
During 2022, the country managed to market the industry to new visitor markets and accomplish the visitor goal that was set for the year. Just days before the year ended, the tourism industry announced the arrival of 1.6 million tourists, making it another successful year to the tourism industry.
However, even with the accomplishments that the country’s tourism industry brought in 2022, the economic situation of the Maldives was in a questionable state throughout the year. In addition to the debt situation getting out of hand, the increased level of borrowings from foreign sources was making a lot of people anxious about the future of the economy. Especially as 2022 had not been an easy year on the economies of countries around the globe as well, due to several reasons such as Russia-Ukraine war, climate change and the changing global economy.
While many feared that 2023 would start with more news regarding the economy of the Maldives spiraling out of control, in a surprising turn of events the Finance Minister Ibrahim Ameer has stated that the Maldivian economy has finally returned to pre-COVID-19 levels. In his statement given on January 1, 2023, the Finance Minister credited the tourism industry for helping the Maldivian economy become as stable as it is today. Additionally, he also highlighted on the tourism arrival target for 2023.
The Maldivian tourism industry is definitely achieving new milestones. The country has been working hard to develop its tourism sector and it seems that this hard work is paying off. However, there is no doubt that the Maldives economy has big challenges due to the high level of debt that the country needs to pay off.
In order to pay off the country’s outstanding debt, the whopping MVR 42.6 billion budget set for 2023 largely aims to help the economy recover from the state COVID-19 has left on the economy. With the start of 2023 looking a bit brighter than 2022, with proper macroeconomic policies in place, there might be a fighting chance that the Maldivian economy can recover from the severe debt situation and turn its economy around.