Given the dominant role of tourism in the Maldivian economy, real GDP growth in 2021-22 will be tied closely to boosting tourism activity in the islands. An anticipated recovery in international travel and the country's impressive inoculation programme will allow growth to gain traction in the second half of this year and into 2022. With the opening of the country's border to travellers from South Asia from mid-July onwards, tourists from India-a major source of tourism for the Maldives-are expected to return in strong numbers.

However, outbound tourism from China-the other main source of tourism-is expected to remain depressed until end-2022, as Chinese tourists will still be required to undergo long periods of quarantine after re-entering the country. Nonetheless, the recovery in tourism receipts compared with 2020 is likely to be more pronounced, as tourists who were unable to travel abroad in 2020 could be motivated to take longer holidays this year.

Following a contraction of 33.6% in 2020 (according to official sources), we expect the economy to rebound by 18.6% in 2021, reflecting a gradual revival of domestic activity and an anticipated doubling of tourist arrivals from their level in 2020. This will still be below the pre-pandemic levels of visitor arrivals and will fall short of the government's target of attracting 1.5m tourists in 2021.

In 2022, assuming that new variants are kept at bay, we expect widespread vaccination globally to produce above-average momentum in international travel, especially as outbound tourism from China begins to recover in the latter half of that year. This will boost real GDP growth in the Maldives to 19.5% as tourist arrivals and the economy edge closer to their pre-pandemic size.