Business activity in the Maldives continued to expand across most major sectors during the fourth quarter of 2025, supported by sustained tourism momentum and gradually improving financial conditions, according to the latest Quarterly Business Survey released by the Maldives Monetary Authority. The survey indicates that overall activity increased in all sectors covered, with the exception of wholesale and retail trade, which experienced mixed developments. Despite this divergence, employment levels rose across every surveyed sector, reflecting steady labour demand as businesses adjusted operations in response to higher activity levels and evolving market conditions.
Tourism remained the strongest-performing sector, underpinned by the traditional peak travel season and robust global demand for Maldives resort experiences. Businesses reported higher revenues, stronger resort bookings, rising room rates, and increased employment during the quarter, highlighting the continued appeal of the Maldives as a premium destination. Resorts and tourism operators also pointed to improved occupancy levels and sustained interest across key source markets, reinforcing confidence in the sector’s resilience. While expectations for the first quarter of 2026 remain positive, operators anticipate a more moderate pace of growth compared to the previous quarter, suggesting a gradual stabilisation as the peak season advances. This outlook reflects a maturing growth phase rather than weakening demand, with resorts continuing to focus on service quality, product enhancement, and operational efficiency to maintain competitiveness.
The construction sector also recorded an expansion in activity, with firms reporting higher construction volumes and stronger order books. Employment levels increased during the quarter, while financial and overall business conditions turned positive after remaining subdued in earlier periods. Looking ahead, construction firms remain optimistic about continued activity, supported by ongoing infrastructure projects and private sector developments, although expectations point to slower employment growth alongside sustained cost pressures and higher capital expenditure plans.
In contrast, activity in the wholesale and retail trade sector showed signs of strain, as sales volumes declined sharply during the quarter and average selling prices fell. Despite these challenges, firms reported improvements in their financial and overall business situations, indicating that cost adjustments and inventory management measures may have helped stabilise operations. Expectations for the upcoming quarter are more positive, although businesses anticipate continued downward pressure on prices as competition remains intense.
The transportation and communication sector recorded growth in demand and revenue during the quarter, reflecting increased movement of goods and people as economic activity strengthened. However, employment growth slowed and wage costs increased. While sentiment for early 2026 remains generally positive, expectations are weaker than in the previous quarter, with firms expressing a more cautious view on future demand and overall business conditions.
Across all sectors, businesses reported rising input prices during the quarter, although expectations vary for the period ahead. Tourism firms expect slower growth in costs and prices, while construction and transportation firms anticipate further increases. Wholesale and retail businesses, meanwhile, expect cost pressures to persist alongside declining selling prices. Access to credit continues to be a key constraint, with financing conditions remaining tight across most sectors, except for some easing reported in tourism. Looking ahead, businesses expect credit conditions to remain restrictive, underscoring ongoing challenges for private sector investment even as overall economic activity shows continued expansion.
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