Updated November 16 with Labour statement

The European Commission expects Malta’s economy to grow at a faster rate this year than it had predicted in the spring.

An economic forecast for all member states released by the Commission on Friday notes that real GDP in Malta is project to grow by 5% this year, up by up 0.4 percentage points from its spring estimate. The strong performance is attributed to robust domestic demand and a positive contribution from net exports, supported by rising tourism and steady immigration flows.

Malta’s GDP growth projection is the highest across the EU, beating the 3.6% growth rate forecast for Cyprus.

Average GDP growth across the EU is forecast to be just 0.9% (0.8% for the Eurozone). The EU as a whole is expected to grow at a slightly faster rate in 2025 and 2026, with GDP growth projections rising to 1.3% and 1.5% respectively. 

Malta’s economy is expected to grow by 4.3% in both those years, the Commission believes.

In its assessment of Malta, the Commission noted that tourist arrivals and tourism expenditure has continued to rise at a rapid pace, with the IT, finance and recreational sectors also seeing growth.

All that is driving exports, which are outpacing imports and providing a net boost to GDP.

Prime Minister Robert Abela said the report meant Malta's economy was projected to grow at "more than five times the European average". 

The European Commission’s forecast is also bullish about Malta’s jobs market, saying it expects unemployment to remain low at 3.2% this year and fall to 3% by 2026.

There is less good news for individual workers, however. Commission forecasters say they expect wage growth to remain modest and just above inflation, because many of the jobs that will be added will be in low-paying sectors.

Malta’s government deficit is forecast to narrow, falling to 4% of GDP in 2024 from 4.5% in 2023. This reduction is linked to lower subsidy spending and the restructuring costs of the national airline. By 2026, the deficit is projected to decline further to 3.1% of GDP, although it will remain above the 3% threshold, the Commission said.

The debt-to-GDP ratio is expected to rise slightly to 49.8% in 2024. However, smaller primary deficits and improved tax administration are anticipated to stabilise the debt ratio just above 50% of GDP by 2026.

Labour: Here's the beef

In a statement issued on Saturday, the Labour Party highlighted the report's findings and said they were the result of a well-managed economy. 

 "Can you imagine Bernard Grech getting these results?" the party asked. "He wasn't even capable of issuing a pre-Budget document. Its author ended up asking 'where's the beef'?"