Maldives

Maldives’ economic growth has been highly volatile, driven primarily by a high-end tourism industry. The economy improved marginally in 2016–17 on a recovery in tourism and construction but continues to face large and growing fiscal and external imbalances. Going forward, Maldives’ main challenge is to manage a surge in infrastructure investment which has the potential of transforming the economy but also creating risks from high and rising public debt. The rapid debt buildup, a widening current account deficit, and low international reserves leave the Maldives inherently vulnerable under this constellation of risks and reduced policy space.