The Asian Development Bank (ADB) has forecast that the Maldives’ economy will grow by 3 per cent next year, while inflation is expected to ease.

In its latest Asian Development Outlook, ADB projected GDP growth of 1 per cent this year and 3 per cent in 2027. Inflation is forecast to average 2.2 per cent this year and fall to 2 per cent next year.

ADB said tourism has faced challenges due to instability in the Middle East, with tourist arrivals declining by 5.7 per cent during the first six months of the year compared with the same period last year.

Despite the decline in arrivals, tourism revenue increased by 1.9 per cent between January and May, supported by higher visitor spending.

The report also highlighted a 49.7 per cent decline in fish exports during the first six months of the year, citing weaker fisheries activity, weather changes, higher freight costs, operational delays and lower demand.

ADB said continued tourism recovery and stronger services exports are expected to support economic growth next year, although high public debt, fiscal pressures and external financing needs remain key risks.