Decline in construction results in economic slowdown

Male' city. (Sun Photo/Mohamed Afrah)

World Bank has stated that Maldives is suffering from an economic slowdown due to the completion of two massive infrastructure development projects in the country, and overall decline in construction.

“The South Asia Economic Focus Report” formed by the World Bank showed that Maldivian GDP stood at  percent in 2018. Economic development had halted at 5.2 percent in 2019. The main reason for this slowdown was due to a slowdown to the construction industry after the completion of the Sinamale’ bridge and Velana International Airport development project.

The countless resorts developed in different areas of the country during the last five years were also a reason for the boom experienced by the construction industry. The completion of these projects also contributed to the slowdown in the economy which would now have to be dependent upon the tourism industry, according to the World Bank.

The World Bank also estimated that new infrastructure investments and broadening of the tourism industry will see Maldivian economic development steadily remain at 5.6 percent by 2020. While the World Bank predicted that Maldives would have to rely more on tourism, it also highlighted some of the issues that the country might face in the industry.

The World Bank predicted that Maldives would be negatively impacted if there was a slowdown to the world economy or Chinese economy, which is the single biggest market for tourists for the Maldives.

Maldives is not alone in the region for experiencing this economic slowdown which is attributed to the slowdowns experienced by the country in 2008 and 2012.