Development has been centered upon the tourism industry and its complementary service sectors, transport, distribution, real estate, construction, and government. Taxes on the tourist industry have been plowed into infrastructure and used to improve technology in the agricultural sector.

GDP in 2004 totaled $695 million, or about $2,400 per capita. While Maldives had experienced relatively low inflation and high real GDP growth in recent years, the December 26, 2004 tsunami inflicted severe damage, estimated at $450 million (approximately 60% of GDP). As a result of interrupted tourist inflows and livelihoods, Maldivesí economy fell by about 5% in 2005, though the World Bank predicts positive growth should resume relatively quickly, as the tourist trade picks up.

The Maldives has been running a merchandise trade deficit in the range of $200 to $260 million annually since 1997. The trade deficit ballooned to $386 million in 2004, largely the result of increased oil prices.

International shipping to and from the Maldives is mainly operated by the private sector with only a small fraction of the tonnage carried on vessels operated by the national carrier, Maldives Shipping Management Ltd. Over the years, the Maldives has received economic assistance from multilateral development organizations, including the UN Development Program (UNDP), Asian Development Bank, and the World Bank. Individual donors--including Japan, India, Australia, and European and Arab countries (including Islamic Development Bank and the Kuwaiti Fund)--also have contributed.

A 1956 bilateral agreement gave the United Kingdom the use of Gan--in Addu Atoll in the far south--for 20 years as an air facility in return for British aid. The agreement ended in 1976, shortly after the British closed the Gan air station.

Since the first resort was established in 1972, more than 87 islands have been developed, with a total capacity of some 19,000 beds. The number of tourists (mainly from Europe) visiting the Maldives increased from 1,100 in 1972 to 617,000 in 2004. The average occupancy rate is 84%, though this figure will be smaller for 2005 due to the tsunami, with the average tourist staying 8 days.