Finance Minister Hassan Zareer has revised the Maldives' economic growth forecast for 2026 sharply downward, projecting expansion of between 0.6 percent and 1.8 percent.
The earlier forecast of 5.3 percent has been scaled back following disruptions caused by the conflict in the Middle East. These included airspace closures and flight cancellations that affected European tourist markets, a key source of arrivals.
Zareer told parliament during the budget presentation that year-to-date tourism performance is 3.6 percent lower than last year. The government now estimates 2.17 million tourist arrivals by year-end, compared with 2.25 million in 2025 and an initial target of 2.4 million.
Higher energy costs and weaker tourism revenues have strained public finances. The minister described the conflict as the third major external shock to the economy in the past decade.
Despite the slowdown, the government anticipates a recovery next year, with projections ranging from 2.28 million to 2.5 million arrivals supported by promotional efforts under a Visit Maldives Year campaign.
