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The Economy of Maldives

Maldivian Economy

Maldives' map

Economy - overview: Tourism, Maldives' largest industry, accounts for 28% of GDP and more than 60% of foreign exchange receipts. Over 90% of government tax revenue comes from import duties and tourism-related taxes. Fishing is the second leading sector. Agriculture and manufacturing continue to play a lesser role in the economy, constrained by the limited availability of cultivable land and the shortage of domestic labor. Most staple foods must be imported. Industry, which consists mainly of garment production, boat building, and handicrafts, accounts for about 7% of GDP. The Maldivian Government began an economic reform program in 1989 initially by lifting import quotas and opening some exports to the private sector. Subsequently, it has liberalized regulations to allow more foreign investment. Real GDP growth averaged over 7.5% per year for more than a decade. In late December 2004, a major tsunami left more than 100 dead, 12,000 displaced, and property damage exceeding $300 million. As a result of the tsunami, the GDP contracted by about 4.6% in 2005. A rebound in tourism, post-tsunami reconstruction, and development of new resorts helped the economy recover quickly, with GDP growth registering 5.7% in 2008. The trade deficit has expanded sharply as a result of high oil prices and imports of construction material. Diversifying beyond tourism and fishing, reforming public finance, and increasing employment are the major challenges facing the government. Over the longer term Maldivian authorities worry about the impact of erosion and possible global warming on their low-lying country; 80% of the area is 1 meter or less above sea level. Government spending on social needs, subsidies, and civil servant salaries have created a large budget deficit and inflation has picked up sharply, reaching nearly 13% in October 2008 due to high oil and food prices.

GDP:

GDP - real growth rate: 5.7% (2008 est.) 7.6% (2007 est.) 18% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 7% industry: 17% services: 76% (2006 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: NA% highest 10%: NA%

Distribution of family income - Gini index:

Inflation rate (consumer prices):

Labor force: 128,800 (2006)

Labor force - by occupation: agriculture: 22% industry: 18% services: 60% (1995)

Unemployment rate: 14.4% (2006 est.)

Budget: revenues: $762 million (including foreign grants) expenditures: $884 million (2008 est.)

Industries: tourism, fish processing, shipping, boat building, coconut processing, garments, woven mats, rope, handicrafts, coral and sand mining

Industrial production growth rate: -0.9% (2004 est.)

Electricity - production: 270 million kWh (2007 est.)

Electricity - production by source:

Electricity - consumption: 203.7 million kWh (2006 est.)

Electricity - exports: 0 kWh (2008 est.)

Electricity - imports: 0 kWh (2008 est.)

Oil - production: 0 bbl/day (2008 est.)

Oil - consumption: 5,490 bbl/day (2006 est.)

Oil - exports: 1,499 bbl/day (2005)

Oil - imports: 5,362 bbl/day (2005)

Oil - proved reserves: 0 bbl (1 January 2008 est.)

Natural gas - production: 0 cu m (2008 est.)

Natural gas - consumption: 0 cu m (2008 est.)

Natural gas - exports: 0 cu m (2008 est.)

Natural gas - imports: 0 cu m (2008 est.)

Natural gas - proved reserves: 0 cu m (1 January 2008 est.)

Agriculture - products: coconuts, corn, sweet potatoes; fish

Exports: $113 million f.o.b. (2008 est.)

Exports - commodities: fish

Exports - partners: Thailand 28.3%, UK 17.6%, France 8.8%, Sri Lanka 8.6%, Algeria 8.2%, Japan 6.4%, Italy 4.1% (2007)

Imports: $1.276 billion f.o.b. (2008 est.)

Imports - commodities: petroleum products, ships, foodstuffs, clothing, intermediate and capital goods

Imports - partners: Canada 35.2%, Singapore 15%, UAE 10.2%, India 7.4%, Malaysia 7.1% (2007)

Debt - external: $477 million (2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: rufiyaa (MVR) per US dollar - 12.8 (2008), 12.8 (2007), 12.8 (2006), 12.8 (2005), 12.8 (2004)

Fiscal year: