Maldives Fiscal and Economic Outlook 2009 - 2011

Outlook for the Major Economic Sectors TOURISM SECTOR The tourism sector is the largest contributor to the country's GDP, accounting for an average of 30 percent over the past decade or so. However, the sector is very vulnerable to external and internal events and shocks, as seen by the drop in arrivals following the September 11th terrorist attacks on the United States, and following the tsunami disaster that struck the Maldives at the end of 2004. Although recovery from these events was swift and the industry has always been very resilient, the current global financial and economic crisis is expected to have far reaching implications for the tourism industry in the Maldives, and as such for the whole economy.Tourist arrivals for 2008 were initially estimated to show a growth of 9 percent. However, due to the current global economic and financial crisis and the resulting recessions in our main tourism markets in Europe, actual arrivals growth was at 1.1 percent for the year. For 2009, tourist arrivals, initially estimated at 691,000, at a growth of 0.9 percent, has now been revised down to a negative 11 percent, based on actual tourist arrivals for the first two months of the year, and feedback from the tourism industry. However, it is expected that the recession will somewhat abate in the last quarter of 2009, and we may see arrivals growth of 1 percent and 2.5 percent for 2010 and 2011 respectively.download