Maldives Faces USD 90 Million Loss Amid Escalating Middle East Conflict, Govt Warns

The Maldivian economy stands to lose between USD 85 million and USD 90 million if the ongoing war in the Middle East persists for another month, Minister of Finance and Planning Moosa Zameer has warned. 

Speaking at a press conference convened by the Special Committee of Ministers appointed by President Dr Mohamed Muizzu, Minister Zameer underscored the growing economic strain triggered by the conflict, particularly due to disruptions in tourism and rising fuel costs. 

The government, he said, is bracing for deeper fiscal challenges and has been instructed to prioritise critical sectors such as housing and healthcare, despite shrinking revenues. 

“We cannot cut essential expenditures, including medical costs. To manage, we may have to reschedule projects and reevaluate cash flow,” he said, highlighting the President’s directive to safeguard public welfare during the crisis.

Minister Zameer further cautioned that if hostilities continue for six months, the government will be forced to implement additional austerity and stimulus measures. A major concern is the surge in fuel spending, which has already strained the national budget, prompting the government to consider seeking additional financing from multilateral development partners. 

In a bid to cushion the impact, the government has launched measures to strengthen the fisheries sector—long seen as a vital economic alternative to tourism—by offering subsidised fuel to skipjack and yellowfin tuna fishermen, thereby encouraging increased production and exports.

The tourism sector, which contributes over a third of the nation’s GDP, has been hit hard. According to recent data, tourist arrivals have plunged by 21 percent over the past three weeks as global travelers reroute or postpone vacations amid regional instability. 

Minister of Tourism and Environment Thoriq Ibrahim, however, expressed optimism, noting that the industry is proactively managing the downturn. 

"We are arranging for cancellations to be rebooked without any penalty," he said, adding that many tourists are choosing to reschedule rather than abandon their plans entirely. 

"Those who cancel now are likely to come later this year, especially once the situation stabilises."

To revive demand, Ibrahim announced an aggressive outreach campaign, including high-level delegations to international travel fairs next month. 

“We are making personal visits to key markets to reassure travelers and rebuild confidence in the Maldives as a safe and attractive destination,” he said.