Update Country Report Maldives 05 Feb 2021

Event

The Health Protection Agency (HPA), an arm of the health ministry, has tightened restrictions for a period of two weeks starting February 3rd amid a surge in coronavirus (Covid-19) cases in the Maldives.

Analysis

After months of recording less than 100 new cases daily, the infection rate in the Maldives has been rising since January, with 215 new cases being recorded on February 1st-the highest number of daily infections to date. These cases have been mainly concentrated in the greater Malé region, which includes the capital, Malé, and four other adjoining suburban districts. The authorities claim that about 30% of the recently detected cases were caused by the new more contagious variant that was first found in the UK.

The HPA has announced a slew of measures, including a ban on public gatherings, to reduce community spread of the virus. These include night curfews, closure of educational institutions and suspended travel out of the greater Malé region. The government has also extended the state of public health emergency (which has been in place since March 12th 2020) until March 5th 2021. Notably, restrictions on tourists have not been tightened beyond the long-standing requirement of a negative Covid-19 PCR test.

The resorts are located on islands outside of the greater Malé region and are thus unaffected by the tightening of restrictions. Since the opening of borders in July 2020, tourists arriving at the Malé airport are immediately transferred to their resort island through seaplanes and all incoming luggage is sanitised. This process has not been changed, as the government is keen to sustain tourist inflows. Resort and airport staff have been included in the priority group to be vaccinated under the country's vaccination programme which began on February 1st. Although this further reduces the chances of travel restrictions being imposed, cautious travellers could nonetheless drop their plans to visit the Maldives amid the recent flare up in cases. This notwithstanding, The Economist Intelligence Unit's core forecast remains that recent momentum in tourist inflows, especially from India and Russia, will be maintained.

Impact on the forecast

We believe that the imposition of restrictions could be extended beyond two weeks if the number of cases continue to rise, with additional measures being introduced, if needed, to ensure that the borders remain open to tourists. We continue to expect economic growth to rebound by 21% this year, led by a doubling (at least) of tourist arrivals.