Wages are on track to increase by a minimum of €5 to €6 per week next year, marking the lowest cost-of-living adjustment in recent years, according to the Malta Employers Association.

Every year a cost-of-living (COLA) adjustment is awarded to compensate for inflation over the previous year. It is worked out on a fixed formula based on the cost of a basket of products and the minimum wage. 

Paid by employers as part of their workers' salary, the COLA hit a record €12.81 last year - a 30% increase on the previous year's adjustment. 

But next year, employers will have to pay out a much lower increase.

In response to press questions during a pre-budget event on Tuesday, Kevin Borg, director general of the MEA, said the expected figure is likely to be between €5 to €6.

If approved, this would signify a drop of between 53% to 60% in the COLA adjustment. 

Times of Malta understands this figure is on track but may be revised after the publication of inflation figures for August and September. 

Annual inflation has been falling gradually this year but rose slightly to 2.3% in July, which was still below the EU average.  

While the last few years saw a massive uptick in COLA, in the previous 10 years it hardly exceeded €4.

Earlier this year the government introduced the Stabbiltà initiative, through which it struck a deal with food importers and major retailers to curb inflation. 

This was achieved by stabilising the prices of over 400 food products and slashing the recommended retail price of others.