Construction prices climb by 13.53 percent

Statistics shows that the Producer Price Index (PPI) for the construction sector rose by 13.53 percent in March 2025 compared to the same month in 2024.

PPI measures the average change in prices received by domestic producers for their goods and services. Essentially, it captures inflation from the perspective of producers rather than consumers. PPI reflects prices at the first point of sale for a wide range of products and some services.

According to statistics published by Maldives Bureau of Statistics (MBS) on April 29^th, the month-on-month PPI for the construction sector in 2025 followed an increasing trend. Specifically, it recorded a 0.14 percent increase in January, followed by a 0.01 percent rise in both February and March.

Meanwhile, the year-on-year growth in PPI between March 2024 and 2024 was at 13.53 percent.

MBS attributed the changes to the increasing cost of labor and import prices.

The construction PPI consists of building construction and road construction, carrying weights of 0.75 and 0.25, respectively.

Notably, construction prices in the Maldives have risen during a period of economic fragility for the country.

Maldives has to repay USD 688 million for foreign loans this year alone, and MVR 1.1 billion over the next two years.

Notably, top global credit rating agency, Fitch, has maintained Maldives’ credit rating at ‘CC’, citing risk of default persists. In this regard, Fitch said it believes persistent external and fiscal vulnerabilities will complicate refinancing of the sovereign's impending large external debt-servicing obligations in the year ahead, even as gross foreign exchange reserves have increased 

To improve the rating, Fitch has urged to increase foreign exchange reserves, cut down expenditure and implement fiscal reforms.

Notably, another global credit rating agency, Moody’s has also affirmed Maldives’ credit rating at Caa2, which had been downgraded in September of last year.

Despite its high debt burdens, the Maldivian government has affirmed it will not default on any loans. The current administration cited one of its biggest achievements as “saving Maldives from bankruptcy”.