Finance Minister Hassan Zareer has projected that economic growth in the Maldives will slow to between 0.6 and 1.8 percent this year, a significant revision from the earlier forecast of 5.3 percent.
Presenting the 2027 budget to Parliament, Zareer said the conflict in the Middle East had disrupted travel routes used by European tourists, reduced airline frequencies and raised fuel costs. Year-to-date tourist arrivals are 3.6 percent lower than last year, and the government now expects 2.17 million visitors by year-end compared with 2.25 million in the previous year.
He described the conflict as the third major external shock to public finances in a decade. The proposed 2027 budget totals MVR 59.7 billion, MVR 4.5 billion less than the 2026 allocation, with a focus on fiscal consolidation and macroeconomic stability without new taxes. Growth is forecast to rebound to between 3.9 and 6.8 percent next year.
Zareer said the government’s priority is to place the economy on a path toward developed-country status by 2040 while managing elevated debt levels. Official reserves are projected to rise from USD 817.7 million at the end of this year to USD 907.2 million by the end of 2027.
