Male’ Maldives – Maldives Monetary Authority has stated that the largest contributors to the annual inflation rate were information and communication sector, housing rent, tobacco and vegetables.
According to the MMA’s statistics, information and communication contributes to -0.9 percentage points, housing rent contributes to -0.9 percentage points, tobacco contributes to 0.5 percentage points and vegetables contribute to 0.2 percentage points to the annual rate of inflation during September 2020.
In the ‘Economic Updates – October’ report published by the central bank, it stated that the continued to remain negative in September 2020 even though, inflation edged up to -0.9 percent in September 2020 from -1.2 percent in August 2020 mainly reflecting the increase in price of tobacco. According to MMA, the change was a result of the seventeenth amendment to Import Export Act which imposed additional duties on specific tobacco products after it was ratified in July 2020.
MMA had also stated that food prices continued to pick up largely due to the rise in prices of certain vegetables and the inflation was further dragged down by y the fall in the price of information and communication services; and housing rent, which reflected a reduction in telecommunication prices and temporary relief given on rent due to COVID-19.
MMA also stated that the real GDP growth is now projected to decline significantly in 2020 due to the severe impact of COVID-19 pandemic on tourist arrivals amid strict measures taken by governments across the world to contain the spread of COVID-19. In addition to this, tourist arrivals is expected to fall sharply in 2020, with negative spillover effects on all major sectors of the economy such as transport and communications; construction and; wholesale and retail trade.