The value of merchandise imports dwarfs that of exports, and the country has historically run a wide deficit on its goods trade account. We expect the trend to continue in 2021-22. A strengthening of external demand over the next two years and ongoing efforts to extend the country's fisheries exports (the main export commodity) to Russia and China will underpin a bounce-back in exports. At the same time, a recovery in domestic activity and global oil prices will fuel the import bill, the size which will continue to exceed exports by a wide margin.

By contrast, the Maldives' tourism services exports (accounting for 90% of total services credits) have consistently exceeded services debits, keeping the services balance in surplus. An anticipated recovery in tourist arrivals in 2021-22 will enlarge the services surplus further, but it will be insufficient to offset the goods trade deficit.

The primary and secondary income accounts will remain in deficit over the forecast period, reflected high interest payments and negligible remittance inflows. Given the prevalence of existing trends, the current account will remain in the red in 2021-22, but rising tourism receipts will result in a narrowing of the deficit to the equivalent of 20% of GDP on average in 2021-22, from an estimated 26.6% of GDP in 2020.