BALANCE OF PAYMENTS
Definition:
- A systematic record of all transactions between residents of one country and the
rest of the world.
- Credits: The money foreign tourists spend in a country
- Debits: The money residents of that country spend on holiday abroad
Country Value
(Credits – Debits)
Developed Negative (-) Deficit
Developing Positive (+) Surplus
- Inbound tourism means visits to a country by visitors who are not residents of that
country.
- Outbound tourism means visits by residents of a country outside that country.
- International tourism, receipts (% of total exports) in Maldives was 78.87 as of
2020. Its highest value over the past 9 years was 85.56 in 2015, while its lowest
value was 78.87 in 2020.
Source: World Tourism Organization, Yearbook of Tourism Statistics,
Compendium of Tourism Statistics and data files, and IMF and World Bank
exports estimates
- Maldives outbound tourism - travel was at level of 92 million current US dollars in
2020, down from 349 million current US dollars previous year, this is a change of
73.64%.
- Despite challenges faced during the year, the Maldives welcomed a total of
555,494 international tourists in 2020. In January 2021, arrival numbers stood at
92,103 and it increased to 99,397 by 3rd February 2021 with a daily average of
2,923 tourists.
- Though this was a decline of 47.5% compared with that of 2020, tourists are seen
spending their holidays for longer duration, extending the average duration of stay
in the Maldives from 7.2 days in 2020 to 9.2 days in 2021.
- In 2020, tourist receipts plummeted due to the Covid-19 pandemic. Of the $3.17
billion billion (2019), only $1.41 billion billion remained. This is a 56 percent
decrease on the Maldives.
- In conclusion, in 2020, with the inbound tourism bringing back $1.41 billion
billion while the outbound tourism was at level of $92 million
We could say Maldives’s tourism balance of payment is a surplus, meaning its
value is positive.
1) A country’s tourism balance of payments ‘surplus’ because:
A) Inbound tourists’ expenditure is greater than that of outbound tourists.
B) Outbound tourists’ expenditure is greater than that of inbound tourists.
C) Their residents spend more abroad than inbound tourism earns.
D) Their residents have high propensities to travel internationally.
A
2) Maldives’s balance of payments is:
A) Deficit
B) Decipher
C) Surpass
D) Surplus
D
