Nasheed warns of hyperinflation as food prices and ferry fares rise

Former President Mohamed Nasheed on Wednesday warned that the Maldives could face hyperinflation if prices continue to rise, citing increases in the cost of food and ferry transport.

Nasheed, who serves as Chairperson of the opposition Maldivian Democratic Party (MDP), made the remarks at a press conference at the party's headquarters, where he presented figures showing changes in market prices over the past week.

He said the MDP was monitoring prices each week to assess changes in the cost of goods.

According to figures presented by Nasheed, the price of a kilogramme of onions increased from MVR 12 last Wednesday to MVR 14 this week, while cucumbers rose from MVR 65 to MVR 105 per kilogramme.

The price of bananas increased from MVR 65 to MVR 70 per kilogramme, while cabbage rose from MVR 65 to MVR 105.

Nasheed said the price of an apple increased from MVR 5 to MVR 5.50, while an orange rose from MVR 3 to MVR 4.50. A small pack of diapers, meanwhile, increased from MVR 182 to MVR 199.

He also said ferry fares had recorded increases, although he did not provide figures on changes in ticket prices.

Nasheed rejected claims that concerns over rising prices were based on rumours or speculation, saying the changes could be seen in the prices paid by consumers.

"There are individuals who are very skilled at making TikToks, and being an influencer is fine. However, my role is serving as the MDP Chairperson. This is not about making TikToks; this is about the daily reality and struggles facing Maldivians," Nasheed said.

He challenged President Mohamed Muizzu to identify shops selling the goods at lower prices.

"If President Muizzu can point me to a shop selling onions cheaper than MVR 14 today, I would be very pleased. And if Dr Muizzu can find cabbage cheaper than MVR 105 per kilo — given that people bought it for MVR 65 per kilo just last week — that would be great," Nasheed said.

"If he can provide bananas for less than MVR 70 per kilo, we would certainly buy them for our home. Last week, Maldivians bought bananas at MVR 65 a kilo. Of course, I am unaware of the prices paid for produce at Mulee'aage."

Nasheed attributed the increase in prices to two factors: the shortage of US dollars in the domestic market and delays in unloading cargo at ports.

The US dollar has been trading at more than MVR 22 in the parallel foreign exchange market, compared with the official exchange rate of MVR 15.42.

Nasheed said the increase in the cost of obtaining dollars was being reflected in the prices of imported goods.

He also warned that sustained increases in prices could create further pressure on household expenditure and the economy.

"When prices of goods surge by up to 50 per cent week-on-week, economists describe that condition as hyperinflation," Nasheed said.

"Nations that enter hyperinflation face severe challenges in maintaining economic stability and preserving the living standards and financial wellbeing of their citizens. Our primary concern is the current trajectory of the Maldivian economy and the hardships it poses for our citizens."

Nasheed's comments come as the exchange rate and cost of imported goods have become a focus of political debate, with the government and opposition offering differing assessments of the causes of the pressure on the foreign exchange market.