The Maldives has demonstrated growing economic resilience despite ongoing fiscal and external challenges, with tourism continuing to serve as the country's principal engine of growth, according to the International Monetary Fund (IMF).
In its assessment following an Article IV Mission visit to the Maldives from 4 to 14 June, the IMF noted that the economy has weathered a challenging macroeconomic and financial environment over the past year, supported largely by tourism and government-led fiscal reforms.
According to recent economic data, the Maldivian economy expanded by 2.5 percent during the first quarter of 2025 compared with the same period last year. Growth was driven primarily by strong performances in public administration, construction, tourism, wholesale and retail trade, real estate, and financial services.
While several sectors contributed positively to economic activity, the IMF noted that contractions in transportation, communications and fisheries continued to weigh on overall growth.
Tourism remained the standout performer, reinforcing its central role in sustaining economic momentum and generating vital foreign currency earnings. Visitor arrivals increased by 9 percent during the first half of 2025, reflecting continued international demand for the Maldives as a travel destination. Although the average length of stay declined, the sector continued to make a substantial contribution to national output and economic activity.
The IMF emphasised that tourism has been instrumental in supporting the broader economy amid global uncertainty and financial pressures.
"Over the past year, the Maldivian economy has navigated a challenging macroeconomic and financial environment with improved resilience," said Piyaporn Sodsriwiboon, head of the IMF delegation.
She noted that significant fiscal consolidation measures undertaken in 2025, including stronger revenue mobilisation efforts and expenditure controls, helped ease financing pressures and improve economic stability.
Despite the positive outlook, the IMF cautioned that challenges remain. The institution projected that economic growth could slow to around 1 percent in 2026 due to weaker tourism performance and higher global energy prices. However, growth is expected to recover to approximately 4 percent in 2027 as conditions improve.
The Fund also warned that downside risks continue to dominate the outlook, citing elevated debt levels, vulnerability to external shocks and the likelihood of a widening current account deficit.
In addition, the IMF noted that spillover effects from ongoing conflicts in the Middle East are having an impact on tourism demand and economic activity, highlighting the Maldives' exposure to global developments.
To strengthen long-term economic prospects, the IMF recommended continued fiscal discipline while protecting vulnerable groups from the impact of adjustment measures. The institution also called for structural reforms aimed at removing barriers to growth, improving productivity, strengthening human capital and enhancing climate resilience.
According to the IMF, expanding external demand through bilateral free trade agreements and integrating climate considerations into public finance and investment planning will be crucial to unlocking new sources of financing and supporting sustainable development.
While acknowledging the challenges ahead, the IMF concluded that the Maldives has made notable progress in strengthening economic stability, with the tourism sector continuing to provide a strong foundation for future growth and recovery.
