Malta's debt burden on track to hit 30-year low, finance minister says
EC forecasts half the bloc will fall under scrutiny next year
Malta's debt burden is projected to return to levels not seen in three decades within four years, Finance Minister Clyde Caruana said on Thursday.
During a news conference about Malta leaving the EU's excessive deficit procedure, Caruana said the government is expecting robust revenue levels over the coming years, despite external challenges.
He said that robust revenue levels will allow the deficit and debt-to-GDP ratios to continue shrinking.
“I expect that, over the next four years, the debt burden will go back to what it was 30 years ago," he said.
The European Commission announced on Wednesday that it is dropping excessive deficit procedures against Malta, as the country managed to reduce its deficit levels to the EU threshold of 3% of GDP.
The EU had opened proceedings against Malta in 2024, when the deficit stood at 4.9%. Since then, the deficit has shrunk to 2.2%.
Caruana pointed out that Malta was the only country to be removed from the procedure on Wednesday. Meanwhile, the European Commission is forecasting that 14 member states will be under the procedure next year.
“The trends also show that while deficits in Europe will worsen, the European Commission’s forecasts are different for Malta,” he said.
At the same conference, Prime Minister Robert Abela said the country’s good fiscal standing comes down to progressive economic measures and a clear stance away from austerity.
He said opting for austerity policies would have led to economic stagnation, lower consumption, and a higher burden on families and businesses.
Abela said it was this progressive economic policy that protected Malta from several crises over the years, including wars in Ukraine and the Middle East, as well as energy and logistics crises.
He referred to recent figures from Eurostat, which showed Malta recording the lowest inflation rate in the Eurozone.
“This confirms the strength of the economic policies being applied today to protect from external shocks and protect businesses and families,” he said.