World Bank estimates Maldives' economy will grow by 17.1 percent in 2021
Notes that the Maldives' tourism sector is recovering ahead of early forecasts
Mr. Faris Hadad-Zervos has served as the World Bank’s Country Director for Maldives, Nepal and Sri Lanka since July 2020
World Bank has projected an estimate 17.1 percent growth for the Maldives' economy in the ongoing year of 2021.
Faris Hadad-Zervos, the World Bank’s new Country Director for Maldives, Nepal and Sri Lanka, has visited the Maldives in order to engage in discussions on how best the country can recover from the economic crisis caused by Covid-19.
Faris Hadad-Zervos noted that the Maldivian economy was well on its way to recovering from the downturn caused by Covid-19. He stated that through combined efforts on behalf of the World Bank and the Maldives to support the country's struggling economy, the Maldives' tourism industry has recovered significantly in comparison to the end of last year.
The World Bank's new Country Director for the Maldives Faris Hadad-Zervos arrived in the Maldives after the publication of the World Bank Maldives Development Update: A Digital Dawn Report. According to preliminary estimates cited in the report, real Gross Domestic Product (GDP) is expected to have contracted by 33 percent in the first nine months of 2020 in the Maldives. Total public and publicly guaranteed debt rose from USD 4.4 billion or 78.4 percent of GDP in 2019 to USD 5.6 billion or 139.3 percent of estimated GDP in 2020.
However, the report goes on to highlight proactive measures by the Maldives to preserve monetary and financial conditions, and remarks that the Maldives is expected to experience a slow but steady recovery from economic setbacks caused by Covid-19. The World Bank's report goes on to state that if one million tourists visit the Maldives in 2021, the Real GDP of the country is expected to increase by 17.1 percent in the ongoing year. The forecast extends to 2022, where real GDP is expected to grow by 11.5 percent if tourist arrivals continue to increase up to 1.4 million arrivals.
In the one day visit to the Maldives, the World Bank's new Country Director for the Maldives, Nepal and Sri Lanka Faris Hadad-Zervos met with a number of minister's to coordinate development projects being conducted by World Bank in the country. The discussions centered around the state of Covid-19 in the Maldives, and the degree of the pandemic's impact on the country's economy. Country Director Hadad-Zervos asserted that the World Bank would be a committed partner to revive the Maldives' economy, and went on to discuss potential solutions to the economic crisis, and how best the Maldives could proceed towards an inclusive, equitable and sustainable development plan for the future.
The World Bank responded to the COVID-19 pandemic in the Maldives with a $7.3 million COVID-19 Emergency Response and Health Systems Preparedness Project to help the country prevent, detect and strengthen its public health preparedness. In addition, $10 million in contingency financing, under Disaster Risk Management Development Policy Financing with a Catastrophe Deferred Drawdown Option, and Pandemic Emergency Facility of $952,000 have also been made available to support Maldives. Further, to mitigate the economic impact of the COVID-19 crisis on workers and their families, and to increase the capacity of social protection programs to respond to future emergencies, the COVID-19 Emergency Income Support Project of $12.8 million was recently approved.
The World Bank portfolio in Maldives currently consists of nine active projects with net commitment of $140.6 million and one IDA Guarantee/Trust Fund.
