The ruling Maldivian Democratic Party (MDP) dominates the People's Majlis (parliament), with 65 of the 87 seats. This has enabled the president, Ibrahim Mohamed Solih, to pass the bulk of his administration's agenda. EIU's core forecast is that the MDP will serve out the remainder of its term, which expires in 2024. We also expect Mr Solih to secure a victory in the presidential election in 2023, albeit by a close margin, ensuring policy continuity.

Political stability risk has risen after Abdulla Yameen Abdul Gayoom, the former president of the Maldives (2013-18), was acquitted from a five-year prison term in November 2021. This makes Mr Yameen, who leads the main opposition Progressive Party of Maldives (PPM), eligible to contest the upcoming presidential election. His participation implies that the MDP no longer enjoys a guaranteed victory in the poll.

Political in-fighting within the MDP has also weakened its support base. Relations between the two main party figures-Mohamed Nasheed, the leader of the MDP, speaker of the People's Majlis and a former president (2008-12), and Mr Solih-have been strained owing to differences over matters of complacency and corruption in government functioning.

However, we expect them ultimately to lay their differences to rest, as unity within the MDP will be required to prevent Mr Yameen's political comeback. An arrangement whereby Mr Nasheed softens his demands for changes to the country's political structure-he has been pushing for a shift from presidential to parliamentary governance-and Mr Solih commits to winning back public support, possibly through supportive welfare schemes, will probably surface. However, implementation of such welfare schemes may delay urgently required fiscal consolidation.

Islamic radicalism represents a source of political and security risk, and one that could disrupt the crucial tourism sector. Still, attacks by religious fundamentalists, such as the attempted assassination of Mr Nasheed in 2021, will be isolated events and are expected to be met with a firm security response. As such, we do not expect the security risk to affect tourist arrivals and government functioning meaningfully in our forecast period (2023-24). In the political arena, conservative religious groups such as the Adaalath Party (currently allied with the MDP) will continue to exercise influence and clash with backers of liberal Islamic values, such as Mr Nasheed.