Malta flag Malta: Economic outline

Economic Outline

Economic Indicators

Malta is considered a high-income country and an innovation-driven economy. Thanks to its sound financial foundations, large infrastructure projects, and buoyant domestic demand, the country emerged from the euro area crisis better than most EU Member States, registering one of the highest real GDP growth rates in recent years. Nevertheless, Malta’s economy relies heavily on the tourism sector and international trade, thus is really sensitive to its external environment. After exceptional growth in 2022 (8.1%), real GDP growth is estimated to have remained strong at 6.1% in 2023. Private consumption and net exports grew strongly. By contrast, gross fixed capital formation declined, amid weaker construction activity in 2023 (EU Commission). In 2024, growth is projected at 3.3% by the IMF, driven by net exports and private consumption, which should continue to grow strongly even if at lower rates than in the previous two years. Investment growth is expected to pick up after the construction slowdown, and public consumption is set to remain strong. Growth in 2025 is forecasted at 3.5%.

Malta’s public finances have been significantly consolidated in recent years, with the government budget turning positive. However, in the last few years, national authorities had to deploy a series of measures to mitigate the effects of the pandemic and high energy and food prices, resulting in an increase in budget deficits (6.5% in 2022 and 5.6% last year, as per the IMF). Similarly, the debt-to-GDP ratio increased to 54.1% in 2023 from 52.3% one year earlier, and is projected to follow an upward trend over the forecast horizon, landing at 56.1% by 2025 (IMF), as sizeable fiscal deficits should be partially offset by continued strong nominal GDP growth. Inflation in 2023 reached 5.8%, despite government intervention keeping energy prices at 2020 levels. Inflation in 2024 and 2025 is forecasted at 3.1% and 2.2%, respectively, with ongoing pressures in food and services prices, while retail energy prices are expected to remain stable due to government intervention.

Unemployment in Malta continues to be among the lowest in the EU, with a continuous decrease in unemployment for all age groups and categories in recent years. In 2023, however, unemployment stood at 3.1% (from 2.9% one year earlier), with projections for a marginal increase over the forecast horizon (to around 3.3% by 2025). Increasingly, EU and non-EU European migrants are relocating to Malta for employment, though wages have remained low compared to other European countries. Nevertheless, 20.3% of the Maltese population was at risk of poverty and social exclusion in 2022, according to the latest data by Eurostat. Overall, the country's GDP per capita (PPP) was estimated at USD 55,928 in 2022 by the World Bank, above the EU average estimated at USD 54,249 for the same year.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 18.3720.9622.7424.0225.37
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 35,26438,67441,73843,87946,111
General Government Balance (in % of GDP) -5.9-5.3-4.9-4.2-3.6
General Government Gross Debt (in % of GDP) 51.651.853.655.056.3
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -0.550.400.570.640.67
Current Account (in % of GDP) -

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 GBP

Source: World Bank, 2015


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Latest Update: May 2024