MALDIVES

Country risk rating

D4

HIGH RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD5.3n (World ranking 158, World Bank 2018)
Population 0.52mn (World ranking 170, World Bank 2018)
Form of state Presidential Republic
Head of government Ibrahim Mohamed SOLIH (President)
Next elections 2023, presidential and legislative
  • Important investments from China (the Maldives are part of the Belt and Road Initiative Project) and India
  • A very attractive and resilient tourism industry that continues to grow
  • A track record of sustained, robust economic growth (+5% on average in 2009-2018), thanks to sound tourism and construction sectors
  • High vulnerability to natural disasters (tsunamis) and climate change (rising sea levels)
  • Rising security risks, including an increase in political and social unrest since 2015, an expanding level of drug addiction and a general upturn in crime
  • Rapidly deteriorating public finances: large fiscal deficits have pushed up total public debt from 53% of GDP in 2015 to 72% in 2018
  • Very large, double-digit current account deficits since 2016, which are forecast to continue in the next few years
  • The debt resulting from the Belt and Road Initiative has become an issue and the government intends to renegotiate contracts (in particular with China)
  • Foreign exchange reserves cover only around two months of imports (four months would be a comfortable level)
  • Weak business environment, including feeble rule of law and a high level of perceived corruption

Contact

Euler Hermes

Economic Research Team

research@eulerhermes.com

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