The Maldives Monetary Authority (MMA) has reported a decline in the inflation rate and an overall improvement in the country’s economic performance in the second quarter of 2020.

According to MMA’s second quarter report, inflation fell to 4.6 percent, compared to 5.3 percent during the same period last year. The decrease was mainly attributed to slower rises in food and energy prices.

The report also highlighted a significant improvement in the government’s financial position. Total income increased to MVR 8.9 billion, while total expenditure dropped to MVR 1.6 billion, largely due to reduced capital spending.

The financial sector remained stable and robust, with a capital adequacy ratio of 50 percent and steady growth in loan issuance. MMA also noted that the country’s official reserves rose to USD 832.4 million, supported by a USD 400 million currency swap agreement with the Reserve Bank of India.

Despite global economic uncertainties, the Maldivian economy has continued to expand at a steady pace. The real GDP is projected to grow by 4.5 percent this year, supported by record tourism numbers, a thriving fisheries industry, and a balanced fiscal outlook.

Tourism, one of the main drivers of the economy, saw remarkable growth. The number of tourist arrivals reached one million by the end of June, marking a 16 percent increase compared to the same period last year. China, Russia, and the United Kingdom were listed as the top three source markets, with European visitors forming the largest regional share.

The fisheries industry also experienced strong growth, with fish purchases increasing by 101 percent and tuna catch rising by 133 percent. Meanwhile, the construction and real estate sectors continued to expand, supported by large-scale infrastructure and resort development projects.

According to MMA, these positive trends — combined with stable inflation, growing reserves, and fiscal improvement — indicate a bright and resilient economic outlook for the Maldives for the rest of the year.