Malta’s GDP is expected to grow by 4.3% in 2024 but then ease to 3.5% in 2025 and 2026, the Central Bank of Malta said in a statement on Monday. 

This represents a marginally downward revision for 2025, but an upward revision for 2026 when compared to the Bank’s previous projections.

In its report, the Central Bank said that growth in 2023 was primarily driven by net exports, while domestic demand is expected to be the main growth driver in 2024. 

It also found that private consumption growth continues at a brisk pace while private investment, is expected to gradually recover.

Net exports are also projected to contribute positively, driven mainly by services exports. Domestic demand is expected to continue leading growth in 2025 and 2026. 

Employment growth is set to moderate while the average wage is also expected to grow at a faster rate in 2024, partially due to pronounced inflation and a tight labour market. 

Annual inflation based on the Harmonised Index of Consumer Prices is projected to drop significantly, from 5.6% in 2023 to 2.4% in 2024, before reaching 1.9% by 2026. 

Compared to previous projections, inflation has been revised down by 0.5 percentage points in 2024.

The general government deficit-to-GDP ratio is set to decline to 4.1% in 2024 and narrow down to stand at 3.1% by 2026. 

The general government debt-to-GDP ratio is set to reach 54.3% by 2026. When compared with the previous projection round, the projected deficit ratio is higher, while the debt ratio is broadly unchanged.