Minister of Finance Ibrahim Ameer has revealed state income is expected to reduce by nearly 50% this year, compared to the initial projections.
Speaking at a press conference held at National Emergency Operation Centre (NEOC), Finance Minister Ameer stated the COVID-19 pandemic is going to be devastating for the local economy, as it has forced the shutdown of nearly all tourism operations in the country. He revealed the total state income of 2020, including foreign grants, is now expected to be USD 984 million, compared to the USD 1.9 billion projected in the state budget.
Citing the economic projections made jointly by the Ministry of Economic Development, Ministry of Tourism, and Maldives Monetary Authority (MMA), the finance minister said 5 possible scenarios have been identified based on how the tourism sector can recover amid the COVID-19 pandemic. He said the country is now expected to be in scenario 3, where tourism operations resume in July and the country records 85,546 tourist arrivals this year. He said the scenario still represents a 39% decrease in tourist arrivals, compared to last year.
Furthermore, the minister stated the Gross Domestic Product (GDP) is expected to reduce by 11.5%, which represents a reduction of USD 5.2 billion in terms of monetary value. He added the economic recession will lead to a reduction of wages and loss of jobs of many.
Minister Ameer highlighted the government is maximising efforts to mitigate the impact of COVID-19 on the local economy by reducing state expenditure and seeking foreign grants.