Update Country Report Maldives 21 Sep 2021

Event

By September 18th the Maldives had fully vaccinated 331,405 people, equivalent to 60.3% of the population, according to the latest update from the Ministry of Health.

Analysis

The Maldives has vaccinated more than 60% of its population, crossing EIU's threshold for widespread vaccination and validating our forecast that the country would reach this milestone in the third quarter of 2021. The government plans to have fully vaccinated the entire eligible population (aged 12 and above) by the end of 2021, which would correspond to around 90% of the total population, according to our estimates. We believe that the authorities will succeed in this endeavour.

The Maldives is one of the first countries to achieve widespread vaccination and has pulled ahead of several other tourism-dependent economies in the region. This has prompted many countries to take the archipelago off their restricted-travel lists since July. It has also allowed local authorities to maintain an accommodative immigration policy, including a lack of mandatory quarantine requirements, to boost tourism inflows. Complemented by a bilateral travel arrangement with India (traditionally an important source of tourism), we continue to expect a doubling of inbound tourism to the Maldives in 2021, from around 555,000 in 2020, and a continued recovery in the sector in 2022.

The local authorities have used the Oxford University-AstraZeneca (UK) vaccine as the main candidate in their vaccination programme; this has an estimated efficacy of 63.1% against Covid-19, according to the World Health Organisation; protection against the Delta variant of the virus is potentially even lower. This means that the Maldivian government may have to think about offering booster doses in 2022 to reduce the vaccinated population's vulnerability to the virus. We expect the authorities to be able to procure the required vaccines as global supply improves next year.

Impact on the forecast

Given the strong prospects for the tourism industry in 2021-22, we continue to believe that the economy, which relies heavily on the sector, will expand by 18.6% in 2021. Real GDP growth will accelerate to 19.5% in 2022 as the economy edges closer to its pre-pandemic size.