Male, February 12: Emergency in the Maldives not only has disturbed the country politically, socially but economically too as a report out by Moody’s has said that the situation will result in a decrease in Tourist arrival and also investments in the country.
"If tourists are deterred from travelling to the Maldives for a prolonged period, the crisis will reduce growth and prompt us to revise down our current forecasts of 4.5 percent real GDP growth in 2018. Tourism accounts for one-third of economic output," the report said. It also said the crisis would impede the running of fiscal policy, exacerbating both fiscal and external pressures.
“During a state of emergency in 2015, growth slowed to 2.8% from 6% the previous year, amid a slowdown in tourist arrivals growth to 2.4% from 7.1% the previous year. Previous political disruptions also have negatively affected GDP growth,” the report further informed.
“Net foreign direct investment, which, in 2017 totalled $484.5 million, or 10.4% of GDP, plays an important role in financing Maldives’ large current account deficit of 21.7% of GDP in 2017. A substantial portion of this financing is likely directed toward the tourism industry and an unstable security environment risks reducing future inflows,” it said.