Covid19- How Bad Is the Impact on Maldives Economy

Thursday 2nd of April 2020

Covid19- How Bad Is the Impact on Maldives Economy

In a press conference on 1st April, Minister of Finance Ibrahim Ameer has announced that the economic downfall due to the COVID-19 pandemic may result in MVR 10 billion in budget deficit.

Due to travel restrictions, the country’s main income industry is facing a huge downturn. Bookings in hotels and guesthouses were banned and after the government had suspended on-arrival visa, almost all the resorts had temporarily closed down. This led to over 11,000 resort employees being forced to take unpaid leaves.

Tourism isn’t the only industry affected by the global pandemic. As the country’s main industry goes into a depression, all the other industries suffer from lack of demand and low sales. As a result, many businesses have gone out of market or at least have closed down temporarily which caused further unemployment in the economy.

However, the country’s national bank, telecommunications companies and other major firms are making several attempts to improve the economic condition and aid the community. In fact, businesses hit by the pandemic will be able to apply for emergency fast track financing starting next week under a MVR 2.5 billion stimulus package, officials in Maldives announced on Wednesday.

The stimulus plan includes MVR 1.55 billion in emergency loans for businesses to meet short-term working capital needs. Finance Minister Ibrahim Ameer informed that emergency loans for resorts and local businesses with a turnover of over MVR 10 million in 2019 will be arranged through Bank of Maldives.

Bank of Maldives had also announced a $2 million short-term financing facility for the tourism industry. It allows operational resorts and guesthouses finance up to $2 million to manage their working capital requirements, with a repayment period of three years.