External sector
Tourist arrivals
Tourist arrivals in July 2022 significantly increased by 31.2% compared with the same period of last year, totalling 133,561 tourist arrivals for the month. During the month, the largest number of tourist arrivals were recorded from Russia, followed by India and United Kingdom.
The rate of inflation (annual percentage change in the national CPI) is at 2.5% in July 2022. From the major categories of the CPI, the largest contributors to the annual rate of inflation during the month were Fuels and lubricants for personal transport equipment (54.8 percentage points); Narcotics (36.7 percentage points); Meat (30.7 percentage points).
Fish exports
The volume of fish exports in July 2022 significantly decreased by -67.7% compared with the same period of last year. This was mainly driven by a decrease in Fresh, chilled or frozen tuna exports.
Real GDP growth
After a sharp decline in 2020 due to the impact of the COVID-19 pandemic, real GDP is estimated to grow by 32% in 2021 and is projected to grow further by 12% in 2022.
Total revenue and grants
As per the proposed government budget for 2022, total government revenue and grants is estimated to increase by MVR4.4 billion (29%) in 2021 when compared with 2020. This includes the significant increase in tax revenue and non-tax revenue, largely driven by the growth in tourism GST and resort lease rent revenue, reflecting the recovery of revenue from tourism sector.
Total expenditure
The total expenditure is estimated to record MVR32.5 billion in 2021 compared to MVR28.8 billion in 2020. This shows an increase by MVR3.7 billion (13%) in 2021 when compared with 2020.
Overall fiscal balance in percent of GDP
The government budget proposed for 2022 shows that the overall fiscal balance in percent of GDP is estimated to narrow to a fiscal deficit of 17% in 2021 from 24% in 2020. This reflects the estimated increase in revenue for the year.
Broad money
Annual broad money growth rate decelerated to 15% at the end of August 2022, after registering a growth of 20% in July 2022. This growth was primarily driven by an increase in quasi money, owing to a substantial increase in foreign currency transferable deposits as well as other deposits denominated in national currency. Similarly, narrow money registered a modest growth solely due to a rise in transferable deposits.
Credit to private sector
The annual growth rate of credit to the private sector by commercial banks in August 2022 declined from 1% to -0.4% compared to the previous month. Credit lent to the tourism sector observed the most significant decrease during the month, reflecting the decline in credit provided for new resort development, renovation of resorts and guesthouse operations. Similarly, other loans and advances categories, construction and transport sectors observed marked declines during the review period. However, credit extended for personal loans observed substantial growth, mainly reflecting the local currency lending for credit cards and consumer durables.
Overnight deposit facility (average)
During August 2022, the average Overnight Deposit Facility (ODF) placement stood at MVR 5.7 billion. This marked a growth of 40% in annual terms, largely reflecting the increase in local currency liquidity due to monetization.
Official reserve assets
Official reserve assets decreased to US$ 657.97 million at the end of August 2022 from US$ 728.18 million at the end of July 2022, recording a decline of 10%. Similarly, in annual terms, the official reserve assets registered a negative growth rate of 25% for August 2022.
Total exports (F.O.B) of July 2022 observed a growth of 42.7% compared to July 2021. This was mainly driven by Re-exports (76.0 percentage points) and fish exports (-33.7 percentage points).
Total imports (C.I.F) of July 2022 increased by 55.5% compared to July 2021. Imports of petroleum products had a growth of 115.4 while, imports of wood, metal, cement and aggregates observed a growth of 156.9% during this period.
Export of goods and service
Export of goods and services is estimated to be at US$ 3.95 billion in 2021, a 121% increase compared to 2020. The is mainly driven by the growth of exports of services in 2021. This reflects the strong growth in tourism receipts, owing to the recovery of the tourism sector following the COVID-19 pandemic.
Balance on goods in percent of GDP
In 2020, balance on goods in percent of GDP stood at -39%, down from -43% in 2019. It is estimated to be at -42% in 2021 reflecting the increase in the imports during the year as well as the growth in GDP following the effects of COVID-19 pandemic. It is expected to remain around the same level in 2022.
Import of goods in percent of GDP
In 2020, imports of goods in percent of GDP stood at 46%, lower than the 49% recorded in 2019. This stemmed from the decline in imports due to the pandemic. The imports of goods in percent of GDP is estimated to be at 48% in 2021, largely due to the growth of imports during the year.
Current account balance in percent of GDP
The current account balance in percent of GDP stood at -36% in 2020. Meanwhile in 2021 the current account balance in percent of GDP narrowed down to -9%, driven by the improvement in the surplus of balance of services, reflecting the increase in tourism receipts during the year. On the other hand, current account balance in percent of GDP is estimated to widen to 21% in 2022.
Exchange rate
At the end of June 2022, US Dollar reference rate of MMA stood at 15.41 Maldivian Rufiyaa (MVR) per US Dollar (US$).
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