Maldives and ADB

ADB supports Maldives in addressing its challenges as a small island developing state, improving fiscal management, increasing renewable energy use, developing the private sector, and strengthening knowledge and institutional capacity.

Economic forecasts for the Maldives

Figures are based on the latest edition of ADB's Asian Development Outlook, which analyzes economic and development issues in Asia and the Pacific. This includes forecasting the inflation and gross domestic product growth rates of economies throughout the region.


 

Comparative economic forecasts

The latest available economic data for the Maldives compared to countries in South Asia.


 

Policy Challenge—Enhancing Food Security

Maldives imports almost 100% of its food staples, leaving it vulnerable to exogenous shocks and food insecurity. Global events such as El Niño, the COVID-19 pandemic, and the Russian invasion of Ukraine raised the cost of food and oil imports and prices for consumer goods. Economic or agricultural output volatility in Maldives’ main trade partners also affects domestic price movements and food supply sufficiency. Reflecting its dependence on imports, Maldives suffered a large gap in imported food staples during the Sri Lankan economic crisis, and, when onion supplies from India significantly dropped in 2023, the cost of onions skyrocketed. Estimates in 2021 found 13.4% of the population experiencing moderate or severe food insecurity. Therefore, food security needs to be improved urgently.

Dependence on imports is mainly due to geographical factors affecting the country. Lack of cultivable land, poor soil quality, limited water resources, and frequent extreme weather events like storm surges and flooding make agricultural production difficult in the country. Agriculture is mainly subsistence, while commercial farming remains confined to high-value crops that mostly go to tourist resorts. Livestock production is also limited, restricted to small pockets of poultry and egg production.

Despite inherent geographical constraints, agriculture still has potential to contribute to food security. Maldives has approximately 5,900 hectares of agricultural land but produces only 10% of the country’s overall food requirement. Agriculture’s average share of GDP was a paltry 1.5% from 2005 to 2022. This suggests that there may be scope to expand agricultural production, but a number of challenges confronting the sector must be addressed. These include containing a drop in the number of farmers—which has fallen by 23.7% since 2013, necessitating reliance on foreign workers—and increasing crop yields. To this end, a lack of access to finance, and the high cost of basic farm inputs such as imported fertilizers and seeds, should be mitigated as they inhibit farmers’ ability to increase their crop yields. As per Maldives Monetary Authority data, agriculture accounts for less than 1.0% of total loans to small and medium-sized enterprises. Basic postharvest infrastructure for storage and transportation needs strengthening to enable farmers to bring their goods to market. This is particularly crucial, especially if farmers are to tap and supply the big tourist markets. Similarly, the sector needs better infrastructure to protect farmlands from natural hazards and climate risks.

It is also essential to enhance agriculture-related technical know-how and introduce modern techniques. As highlighted by the National Fisheries and Agricultural Policy, 2019–2029, Maldives’ agriculture-related technical know-how is low. Beyond traditional agriculture, Maldives should invest more in alternative farming technologies to make local agriculture more resilient. Sustainable techniques such as vertical farming, aeroponics, and hydroponics allow large-scale production while minimizing land and water usage. Unfortunately, given the technical knowledge required and high initial financial investments, only a few producers employ these modern methods in Maldives—mostly on agricultural land leased to private businesses—and open field cultivation remains the chief farming technique in the country. The new government has pledged to introduce modern agricultural techniques as part of its efforts to improve food security. Tapping the private sector, the Ministry of Agriculture and Animal Welfare signed an agreement with VC Group Private Limited in January 2024 for a pilot project on vertical farming at the Hanimaadhoo Agriculture Center to identify the most feasible model for wider application across the country. This is in parallel with the planned and ongoing projects with development partners to increase agricultural produce through sustainable and innovative practices and contribute to food security. These measures will help move the country toward food security, but their implementation and further deepening will require political will and commitment.

More resources

Asian Development Bank and the Maldives: Fact Sheet

Asian Development Bank and Maldives: Fact Sheet

The Fact Sheets summarize ADB's partnerships with member economies, providing key facts and figures and an overview of activities and future directions.

Asian Development Outlook (ADO) April 2024

Asian Development Outlook

The Asian Development Outlook analyzes economic and development issues in developing countries in Asia.

Key Indicators for Asia and the Pacific 2023

Key Indicators

The Key Indicators for Asia and the Pacific publication presents data regarding the economic, financial, social, and environmental situations in a broad range of countries across the region.

Basic Statistics 2024

Basic Statistics

The Basic Statistics brochure presents data on selected social, economic, and SDG indicators such as population, poverty, annual growth rate of gross domestic product, inflation, and government finance for economies in Asia and the Pacific.