The European Commission expects Malta's economic growth to moderate and inflation to ease this year, according to an economic forecast issued on Monday.

Malta's performance, however, will still be way better than the EU average, which is projected to see annual GDP growth of 0.8%  (and 0.9% in the euro area). Malta's projected economic growth will be the second strongest, with Ireland projected to see growth at 4.9%.

Last year, Malta's real GDP growth was estimated to have reached 6.6%, which was higher than projected by the commission in the autumn. 

"In 2023, real GDP is forecast to grow at a slow pace at 3.1% following a wider economic slowdown in Malta's main trading partners," the commission said.

That is slightly below projections made by the government in the October budget, when it said it expected economic growth this year to reach 3.5 per cent in real terms.

The commission said that in 2024, real GDP growth is expected to reach 3.7%, supported by net exports and growth in domestic demand. The strong impulse to growth from the recovery in tourism is however set to moderate in 2024, as tourist flows approach pre-pandemic levels. 

Inflation in 2022 reached 6.1%, despite energy prices being kept at 2020 level by government intervention, the commission observes.

In 2023 it is set to remain elevated at 4.3%, due to continuing pressures in food, transport, and imported goods prices. In 2024, inflation is expected to subside to 2.4% as imported price pressures are also set to moderate.