Political and economic outlook

• The Economist Intelligence Unit expects the new president, Ibrahim Mohamed Solih of the Maldivian Democratic Party (MDP), to serve a full term, ending in 2023. However, given the country's history of political instability, risks to this outlook are significant.
• Mr Solih's term is likely to be marked by intense competition between India and China to exert strategic influence on the Maldives. The new government's efforts to confirm and manage the amount of debt owed to China will strain diplomatic ties with that nation.
• The new government will pursue policies designed to put the country's public finances back on a more sustainable footing after a bout of intense spending on infrastructure under the previous presidential administration of Abdulla Yameen Abdul Gayoom.
• We believe that strong economic growth in India will support increased exports of tourism services to that nation in 2019-20. This will serve to drive average annual economic growth of 3.7% in 2019-20.
• Despite the tourism-related surplus on the services account, a wide merchandise trade deficit will ensure that the Maldives continues to post current-account deficits in 2019-20. The scale of the deficit will ease, however, as construction-related imports fall.

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Key changes since previous report

• This is The Economist Intelligence Unit's inaugural report for the Maldives, so the key changes section does not apply.

The quarter ahead

• February-Monthly statistics release (January): The data will provide an overview of the economic situation inherited by the new administration.
• February-March-External debt: The new government is likely to release updated official data about the scale of external public debt. Notably, this should clarify how much debt is owed to China.