Global prices dominate inflationary trends in the Maldives, as domestic consumption is driven mainly by tourism expenditure and is met mostly through imports. Inflation is therefore susceptible to global travel and price swings, and the pass-through is set by the rufiyaa:US dollar peg. However, the government's comprehensive policy of capping the cost of utilities (making up more than a fifth of the consumer price index) and other living expenses for citizens strongly blunts the pass-through of global price pressures. We expect the government to maintain its current subsidies in 2022-23 owing to which, despite a surge in global energy and commodity prices, the pick-up in the headline inflation rate over the forecast period will be relatively modest, averaging 2.3% per year. The introduction of a minimum monthly wage, set in the range of Rf4,500-7,000 (US$291-453) by the Ministry of Economic Development will add to higher cost-push inflation.