IMF Projects Maldives Economic Recovery to 4 Percent Growth in 2027

The International Monetary Fund (IMF) has projected that the Maldivian economy will recover to around 4 percent growth in 2027, returning to its potential level over the medium term, following a challenging period marked by spillovers from the Middle East conflict that weighed significantly on the nation's near-term outlook.

An IMF mission team, led by Piyaporn Sodsriwiboon, visited Male’ from June 4–14, 2026, to conduct the 2026 Article IV consultation. In her concluding statement, Sodsriwiboon acknowledged that while the Maldives faces elevated vulnerabilities, the country has demonstrated improved resilience in navigating a challenging macroeconomic and financial environment.

Economic activity remained robust, supported by strong growth in tourism amid buoyant external demand. This, together with official bilateral support received, somewhat mitigated near-term external pressures and facilitated an increase in international reserves,” she said.

However, the mission noted that weaker tourism activity and higher global energy prices resulting from the Middle East conflict would slow real GDP growth to around 1 percent in 2026, with downside risks dominating the outlook. The current account deficit is projected to widen further, driven by higher import bills.

The IMF emphasised that the Maldives has continued to meet its debt obligations, including timely repayments of sukuk bonds and loans from both official and private creditors, which has alleviated immediate solvency concerns. However, the overall fiscal deficit and public debt are projected to remain elevated, with the risk of overall and external debt distress remaining high.

The IMF recommended that near-term policy priorities include recalibrating the policy mix to sustainably address macroeconomic imbalances, putting debt on a downward trajectory, and maintaining financial stability while protecting the most vulnerable. The mission underscored the need for credible, reform-based fiscal consolidation that restrains spending and strengthens revenue mobilisation.

Additional recommendations included a systematic expenditure review of subsidy schemes—particularly given the surge in global oil prices—targeted at vulnerable groups through proxy means testing. The IMF also called for stronger oversight of state-owned enterprises, enhanced public financial frameworks, and continued monetary tightening through open market operations by the Maldives Monetary Authority.

Over the longer term, the IMF highlighted supply-side reforms to remove structural bottlenecks to growth, strengthen human capital, improve climate resilience, and enhance the business climate through legal and governance reforms as key priorities for sustainable economic development.