Asia Regional Integration Center

The pandemic forced a collapse in tourism, causing a steep 19.0% economic contraction in 2020. Visitor arrivals dropped by 83.6% to their lowest level since 1970. One-third of the labor force was either out of work or on reduced hours. The fiscal deficit rose to 8.2% of GDP in fiscal year 2020 (FY2020, ending 31 July) from 3.6% in FY2019, raising the country’s debt to 65.5% of GDP by July 2020. The current account deficit widened to 17.8% of GDP. Tourism receipts to plummet by 84.8% to less than $5.0 million (from $783.3 million previously). Still, remittances rose by 11.1% to $301 million, and foreign borrowings helped prop up foreign reserves, enough to cover 7.3 months of imports. A revival in tourism and public confidence should see GDP grow by 2.0% in 2021, accelerating to 7.3% in 2022.