Academic eBooks - ޢިލްމީ އީފޮތުގެ ޖަމާ

The Maldivian economy continued to strive in 2024 amidst a challenging global environment marked by persistent geopolitical tensions and tightened financial conditions across major economies. Accordingly, the domestic economy is estimated to have expanded by 5.1%, an acceleration from the 4.7% observed in 2023. Despite the headwinds, the Maldivian economy demonstrated resilience and adaptability, driven by the growth from the tourism sector and sectors related to the tourism sector, including the transportation and communication sector and wholesale and retail trade sector. Meanwhile, the fisheries and construction sector remained subdued. As for inflation in the domestic economy, the average rate of inflation decelerated to 1.4% in 2024 compared to the previous year, owing to downward inflationary pressures from prices of information and communications services as well as prices of energy-related services. However, downward inflationary pressures were partly offset by the higher prices of food items and tobacco, together with the increased cost of services of restaurants and cafés. In 2024, the current account deficit narrowed slightly, owing to the significant improvement in the services account, driven by the growth in the tourism sector and increase in travel receipts. However, the merchandise trade deficit widened, reflecting increased imports and decline in exports of goods. Meanwhile, the net inflows from financial account mainly comprised inflows from FDIs and other investments. Overall, the balance of payments recorded a surplus in 2024, while gross international reserves recorded a slight increment, primarily owing to US$400 million swap obtained from Reserve Bank of India (RBI) in October 2024. According to the growth forecasts estimated jointly by the MMA and the Ministry of Finance and Planning in October 2024, real GDP is projected to grow by 6.4% in 2025, driven primarily by an uptick in real activity in the tourism sector. The risks to the growth outlook for 2025 remain mixed but tilted to the downside, with delayed fiscal reforms, global trade tensions and commodity price volatility, particularly fuel and food. On the upside, operationalisation of the new passenger terminal of Velana International Airport could boost tourism activity and economic growth. Looking into inflationary pressures, domestic policy adjustments and expenditure consolidation measures could exert upward pressure on domestic prices. Further, geopolitical tensions and supply chain disruptions may also drive higher import prices. In 2024, the MMA continued to adopt an accommodative monetary policy to maintain price stability and support sustained economic growth, while mitigating pressures in the foreign exchange market. To strengthen the regulatory framework, Regulation on Foreign Currency was brought into effect on 1 October 2024, superseding the longstanding Monetary Regulation of 1987, and was later repealed with the enactment of the Foreign Currency Act. Further efforts to ease the US dollar shortage were sustained through continued intervention in the foreign exchange market. Despite the postpandemic improvements in foreign currency liquidity, the banking system observed a reduction in foreign currency liquidity during the year. To alleviate the shortage, the MMA lowered the foreign currency minimum reserve requirement (MRR) from 10.0% to 7.5% effective 24 October 2024. The financial sector continues to demonstrate resilience reflected by the ongoing efforts of the MMA to uphold a stable and robust financial system. Commercial banks, which hold over 90% of the sector’s assets, contributed to the sector’s strength and remained well-capitalized, demonstrating resilience through asset growth, robust capital strength and high profitability indicators. The sector also indicated a stable level of non-performing loans (NPLs) and liquidity buffers at prudent levels. The performance of other financial institutions also remained stable, with finance companies remaining well capitalized and the general insurance sector recording strong growth and sound capitalization, supported by an increase in gross written premiums (GWP). In line with efforts to strengthen the legal framework of the foreign exchange market and support financial sector stability, the Regulation on Money Changing Business was issued on October 1, 2024. The MMA continued its efforts to enhance the development of the financial sector by promoting financial inclusion, strengthening consumer protection and modernizing financial infrastructure. As such, MMA spearheaded the formulation of National Financial Inclusion Strategy (NFIS), with preparations underway for the official launch in 2025. Throughout the year, the MMA prioritized advancing the growth and development of Islamic finance in the Maldives through targeted policy initiatives. The MMA also inaugurated its first Research Conference and the Joint Research Workshop in collaboration with Asia-Pacific Applied Economics Association (APAEA) and Asian Development Bank Institute (ADBI) during the year. The aim of both the conference and workshop was to foster dialogue between policymakers, industry experts and academics, while promoting research collaborations between the MMA and external researchers on topics relevant to the MMA. During the conference, the MMA Research Fund was launched, establishing an initial allocation of MVR1.0 million, with the aim of promoting research culture. Recognizing the critical role of human capital in advancing the financial system and institutional progress, the MMA remained steadfast in its effort to attract, develop and retain a highly skilled taskforce. And as part of this commitment, three staff members were given the opportunity to pursue postgraduate studies in the fields of Cybersecurity Management, Forensic Accounting and Accounting and Data Analytics. Further, employees participated in various short-term trainings aimed at enhancing professional competencies across key areas. The MMA also continued to support staff members by extending financial benefits, which included short-term loan through initiatives such as staff loan schemes. The Maldivian economy remained on a steady path of recovery during the year, despite ongoing global and domestic uncertainties. Against this backdrop, the MMA continued to uphold its mandate of price stability and fostering inclusive, stable, and sustainable economic growth.

Academic eBooks - ޢިލްމީ އީފޮތުގެ ޖަމާ

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