The Central Bank of Malta expects economic growth over the coming years to remain strong, averaging 4.4% between 2019 and 2021.

In its economic projections, the bank said growth in private consumption and government expenditure is expected to remain robust, while investment was expected to recover from the contraction recorded in 2018.

Compared with the bank’s previous projections, Gross Domestic Product growth was revised marginally downwards. The bank said this was due to "a delay in a major investment project in the private sector".  

It expects GDP growth over the years to 2021 to be supported by domestic demand, mainly reflecting robust growth in private consumption and investment.

Conversely, the net export contribution to growth is expected to be negative in 2019 and 2020, reflecting the weak international environment, and a pick-up in import growth as a result of strong domestic demand. The contribution of net exports should turn positive in 2021, reflecting faster export growth. 

The pace of job creation is set to moderate but remain strong. The labour market will remain tight, the bank said, with the unemployment rate projected at 3.8% by 2021. 

Annual inflation, based on the Harmonised Index of Consumer Prices, is projected to ease slightly in 2019, before edging up to 1.9% by 2021, reflecting a pick-up in services and non-energy industrial goods inflation.

Moreover, the government balance is expected to remain in surplus over the coming years, such that the debt-to-GDP ratio was projected to decline to below 40% by 2021.

Projections could be negatively affected by external factors, the bank said. Risks to public finances were broadly balanced, as possible slippages in the implementation of investment projects could be offset by higher current expenditure, the Central Bank said.

More details on the Bank's latest projections can be found here .