Expansion of economic activity in first quarter driven by tourism sector growth: MMA

Domestic economic activity expanded in the first quarter of 2014 “driven by the strong growth of the tourism sector during the ongoing high season of the industry,” according to the Maldives Monetary Authority’s (MMA) quarterly economic bulletin.

Total tourism receipts in the first three months of the year increased by 10 percent compared to the first quarter of 2013, reaching US$801.1 million, the central bank revealed.

“In Q1-2014, the average operational bed capacity of the industry also increased by four percent when compared to Q1-2013 and totalled 26,999 beds, contributed by the opening of more resorts and guesthouses during the period,” the bulletin explained.

“Despite the increase in the operational bed capacity of the industry, the occupancy rate of tourism accommodation facilities remained relatively unchanged at 84 percent when compared to Q1-2013, owing to the higher increase in bednights.”

Arrival trends

On arrival trends in the first quarter, the bulletin noted that the 10 percent annual increase in arrivals was “entirely driven by the significant increase (24 percent) in arrivals from the Chinese market.”

Chinese tourists accounted for 27 percent of guests during the first quarter of 2014. According to the Tourism Ministry, the Chinese market expanded by 24 percent with an additional 16,960 tourists compared with the same period of 2013.

Statistics from the Tourism Ministry show that 331,719 Chinese tourists visited the Maldives last year –  a 44.5 percent increase from the previous year.

Chinese tourists accounted for 29.5 percent of all tourist arrivals in 2013.

“Meanwhile, after recording three successive quarters of positive growth, arrivals from Europe (which constitute over half of total tourist arrivals) registered a marginal decline of two percent in Q1-2014, mainly due to a substantial fall in arrivals from Russia owing to its economic crisis and partly due to Easter calendar effects,” the bulletin continued.

“The poor performance of the Russian market (the third main market from Europe since Q2-2012) is in stark contrast to the double-digit growth rates exhibited by the Russian market throughout the last year.”

The bulletin noted that all major markets from Europe recorded a decline in arrivals. While arrivals from Germany – “the main source market from Europe” – and Italy both declined by four percent, arrivals from France declined by two percent.

“The better performance of UK market during the quarter is attributable to the sustained growth of the British economy since last year,” the bulletin observed.

Fisheries and construction sectors

The fisheries industry in the first quarter of 2014 “continued to be adversely affected by falling tuna prices in the international market since September last year,” the bulletin observed.

“This is reflected by the annual decline in fish purchases by collector vessels (12 percent) and the fall in both volume and earnings of fish exports in Q1-2014, by 26 percent and 6 percent, respectively,” the bulletin stated.

The construction industry however continued its “ongoing recovery” in 2014, the bulletin continued, which was “indicated by the strong annual growth in construction-related imports and bank credit to mainly residential housing construction projects.”

“Spurred by the strong performance of the tourism and other key sectors, activity in the wholesale and retail sector also picked up during the review period. This was reflected by a 13 percent increase in bank credit to the sector in the review period compared to Q1-2013, while private sector imports (excluding tourism) grew by 9 percent in the same period,” the bulletin read.

“Main driver of inclusive growth”

Meanwhile, a delegation from the World Bank led by the World Bank Vice President Philippe Le Houérou – in his first visit to the Maldives since assuming the post in July 2013 – met President Abdulla Yameen in late May and agreed to work with the government in developing a national strategy for fostering growth and consolidating public finances.

The discussion focused on “the need to reduce fiscal deficits, create a favourable investment climate for the private sector and delivery of key public services,” according to a press release from the World Bank.

“Maldives has enjoyed economic growth during the last decade and expects to achieve 4.5 percent growth in 2014,” Le Houérou was quoted as saying.

“But it still faces challenges, such as balancing public accounts while delivering public services on some 200 islands across hundreds of kilometres of the Indian Ocean. The issue is how Maldives can make the most of its potential in order to achieve inclusive and sustainable development.”

World Bank Country Director for Sri Lanka and Maldives, Francoise Clottes, noted the country’s “great success in developing a world-class tourism sector to take advantage of its breathtaking beauty.”

“This sector is expected to continue to grow and remains the main driver of inclusive growth and sharing prosperity, going into the future,” Clottes said.


7 thoughts on “Expansion of economic activity in first quarter driven by tourism sector growth: MMA”

  1. According to this report, 80% of the total income to Government is earned through Tourism Industry and yet some people are saying that Tourism Investors are robbing this country.

    I wonder if Resorts are not there, how many people will lose thier job ?

    If resorts are not there, how can Government earn over 800 million last year and expected to earn a billion dollars by end of this year ?

    If those money are not earned , how can Government afford to pay even the salary of civil service people ?

    This is why Nasheed and his allies are trying to damage tourism industry and they don't want to develop this nation and they want people to create violence and not have a peaceful life in Maldives.

    I hope that few MDP thugs who still blindly following Anni will realize that without tourism , Maldives will not be able to pay even the basic salary of civil service people.

  2. If Tourism Industry draws over 800 million US$, you should imagine how much the resort tycoons themselves draw out of the business - especially when the money not even hits any maldives bank .....

  3. Hero on Sun, 8th Jun 2014 6:51 PM

    So according to these figures you picked out of the air, the Maldives must be the wealthiest nation on earth if the money was invested back into the nation, instead of the resort owners back pocket.

    Hell, at these figures you should all be living like kings instead of waiting for more hand outs from the international community.

  4. Tourism sector yielded the Government US$801,000,000 from 27,000 beds in the first 90 days of 2014. Good performance. Someone should be worried about the declining returns from the European sector as this will have a direct impact on Chinese arrival trends. Perhaps more promotional trips to Europe and closer ties with Russia?
    Mr.Hero, it is not a secret that the tourism sector is a multi-billion dollar industry in Maldives. That has been the case for over a decade - solely due to the efforts of private entrepreneurs.
    A cause for concern is how the Government allocates resources from this industry in its budget. Minus corruption, minus wastage, minus all the political ballyhoo, who is benefiting from this increasing returns from the tourism sector? A perfectly valid question to ask right now is - is there a proportional lessening of tax burden on the common man with such increase in tourism tax revenue to the Government? The papers are rife with allegations of increasing inflation - month on month, increasing price index, static wages, increasing tax incidence on the common man? So what is the benefit to the "rayyithu meeha"/ average joe? Fiscal responsibility and debt to GDP with the size of our economy, the domestication of job market...what are the policies that the Government has to address these issues. There is an abundance of economic potential in Maldives - if only decent and intelligent and committed politicians/statesmen lead the way! Bland slogans of jingoistic nationalism and religious zealotry will not lead Maldives to its deserved economic status. When the time comes for vote-sellers and political bargain hunters to be given the boot - perhaps the common man/ joe sixpacks and plain janes will benefit when that time comes.

  5. How can a seasonal jump in visitor arrivals be characterised as tourism SECTOR growth - beats me.

    Sector growth happens when tourism investment (capital and human) goes up. Not when there is a spike in visitors..

    Looks like te NEW MMA is not immune from cheap PR either..

  6. Seasonal comparison is done based on first quarter of 2014 and 2013. This is an indicator of of tourism growth.

    800 Million was earned this year and it was earned in 2013.

    People like DMF , who are blind followers of Anni, will do everything possible to jeopardize our tourism industry.

    Unless we changed to communist country, we can not ask Resort owners to distribute thier income equally to public.

  7. Hero on Mon, 9th Jun 2014 11:36 AM

    Here is a fact for you to swallow, I did not vote for Anni, but don't let facts get in your way of spreading propaganda.

    We can actually tell the resort owners to distribute their income, it's called paying their taxes. You know that payment that got ditched by the coup leaders.


Comments are closed.