Fitch downgrades Maldives to B

Fitch Ratings said it downgraded the Maldives' long-term foreign-currency and local-currency issuer default ratings to B from B+ and revised the outlook to negative from stable.

“Fitch expects the Maldives' economy to be hit hard by the coronavirus pandemic because of the dominance of the tourism sector. The Maldives has recorded few Covid-19 cases so far and can use remote islands for quarantining, if needed, but tourism receipts will nevertheless remain close to zero for months due to global conditions,” said the agency in a press release.

“A deep recession seems unavoidable, as tourism directly accounts for about 25% of GDP, according to national accounts data, and even more indirectly. Our forecast of a 5% contraction in economic activity in 2020 and a rebound to 10% growth in 2021 are subject to significant uncertainty,” Fitch said.

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