Economy

In Progress


The Maldives is one of the most attractive investment places among the south-east Asian countries. The Maldives takes an outstanding place, due to its exotic nature and its natural beauty. The country is still considered to be developing and offers very attractive opportunities for the keen investor.

The number of foreigners investing in the Maldives has been rapidly increasing over the past few years. Services provided through such investments include resort management, sea and air transportation, accounting and management and manufacturing.


Potential investment opportunities for the keen investor to tap in are:

* Tourism industry: e.g. development of exotic holiday resort islands
* Property development in the capital Male' and nearby islands like  Hulhumale ( Most economically Dynamic Island)
* Air and sea transportation
* Marine based industries such as fish processing, aquaculture and marine culture
* Infrastructure development
* Buy out shares in existing businesses
* Participate as an investor in a new company

With a thorough local knowledge, our experts will advice you how to avoid potential risks to maximize the gain through your foreign capital. 

For More information about business opportunities connect us with
classifiedonline@gmail.com

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In ancient times the Maldives were renowned for cowries, coir rope, driedtuna fish (Maldive fish), ambergris (maavaharu) and coco de mer(tavakkaashi). Local and foreign trading ships used to load these products in the Maldives and bring them abroad.
Nowadays, the mixed economy of the Maldives is based on the principal activities of tourism, fishing and shipping.
Tourism is the largest industry in the Maldives, accounting for 28% of GDP and more than 60% of the Maldives' foreign exchange receipts. It powered the current GDP per capita to expand 265% in the 1980s and a further 115% in the 1990s. Over 90% of government tax revenue flows in from import duties and tourism-related taxes.
Fishing is the second leading sector in the Maldives. The economic reform program by the government in 1989 lifted import quotas and opened some exports to the private sector. Subsequently, it has liberalized regulations to allow more foreign investment.
Agriculture and manufacturing play a minor role in the economy, constrained by the limited availability of cultivable land and shortage of domestic labour. Most staple foods are imported.
Industry in the Maldives consists mainly of garment production, boat building, and handicrafts. It accounts for around 18% of GDP. Maldivian authorities are concerned about the impact of erosion and possible global warming in the low-lying country.
Among the 1,900 islands in the Maldives, only 198 are inhabited. The population is scattered throughout the country, and the greatest concentration is on the capital island, Malé. Limitations on potable waterand arable land, plus the added difficulty of congestion are some of the problems faced by households in Malé.
Development of the infrastructure in the Maldives is mainly dependent on the tourism industry and its complementary tertiary sectors, transport, distribution, real estate, construction, and government. Taxes on the tourist industry have been plowed into infrastructure and it is used to improve technology in the agricultural sector.

A downturn in tourism brought markedly slower growth in the Maldives in 2015 and combined with higher capital spending enlarged budget and current account deficits, even as inflation fell to a record low. The outlook is for moderate growth on tepid recovery in tourism and on further infrastructure spending intended to foster economic diversification and higher, less volatile growth over the long term.
Selected economic indicators (%) – Maldives20152016 Forecast2017 Forecast
GDP Growth1.53.53.9
Inflation1.01.21.4
Current Account Balance (share of GDP)-12.6-12.6-10.5

Economic performance

Growth in the gross domestic product (GDP) braked to an estimated 1.5% in 2015 from 6.5% a year earlier as tourism contracted and transport growth slowed markedly. As most taxes are tied to tourism, growth was cut further due to a fall in tax earnings net of subsidies. Growth came largely from robust public investment that propelled a doubling of construction growth to over 40%.
In sharp contrast with previous years, tourism contracted by over 4% as growth in arrivals slowed and bed-night occupancy slipped. Growth in tourist arrivals declined to 2% from 7% in 2014 despite upbeat tourism globally and in Asia. Arrivals from the People’s Republic of China (PRC) - which accounts for 30% of the total - fell by 1% following 6 years of rapid growth and despite resilient outbound travel from the PRC. Arrivals from Europe - which has a 44% market share - picked up but only slightly. Despite some growth in arrivals, bed-night occupancy, which largely determines earnings, fell by 4.3% as the average stay continued to shorten.

Economic prospects

The growth outlook rests heavily on prospects for tourism and public-led investments. Growth will be driven in the near term by investment, as external economic developments will likely keep recovery in tourism modest and gradual over the forecast period.
Arrivals growth may pick up moderately to 5% in 2016, broadly in line with the tourism outlook for Asia. Bed-night occupancy and earnings are projected to recover to positive but minimal growth, held back by the short average stay preferred by Asian tourists. The PRC will continue to lead arrivals growth, but less so in view of recent trends, notably moderating economic growth there and stronger competition from nearer destinations. A stronger pickup from Europe may be expected as economic recovery there gathers pace. Strengthened marketing, new flights, and the opening of 10 new resorts are seen to boost travel interest. Integrated resorts for the middle-income segment that are expected to open by 2017 would also help augment tourism numbers.
Growth will come largely from strong public investments fueling construction and real estate development. The government plans for its public sector investment program to grow by about 140% to 9.1 billion rufiyaa in 2016, with growth easing to 6% in 2017. Most of the investment surge is to be financed through external loans, while domestic borrowing is to be kept restrained.
Assuming similar investment growth in 2015, construction-led industrial growth is projected to reach at least 20% in 2016 in conjunction with the public sector investment program before moderating slightly in 2017. Against this backdrop and the expected gradual recovery in tourism, GDP growth is projected to rise to 3.5% in 2016 and further to 3.9% in 2017. Growth could be much higher if tourism or foreign investment picks up faster than expected, or if oil prices and therefore fuel and electricity subsidies decline more than anticipated.
























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