Malta Economic Forecast

Malta Economic Outlook

December 20, 2019

Annual economic growth slowed to a near seven-year low in the third quarter, dropping to 3.4% from 4.9% in Q2. Both private and government consumption decelerated, while fixed investment growth remained close to zero, likely on Brexit uncertainty and a moderating external backdrop. That said, economic activity was still robust compared to regional peers. Moving to the fourth quarter, available data is mixed. The trade deficit widened in October, as merchandise exports dipped year-on-year, and industrial production growth slowed. Tourism arrivals, however, increased in the same month, while a low unemployment rate and an uptick in consumer sentiment bode well for private consumption. Meanwhile, in other news, Prime Minister Joseph Muscat announced his intention to resign early next year following rising public anger over the death of journalist Daphne Caruana Galizia. The economy should not be significantly affected.

Malta Economic Growth

Growth is seen ebbing in 2020 owing to weaker private consumption growth, while fixed investment will also slow due to a moderation in residential construction investment. However, the economy will still expand far above the Eurozone average. Downside risks stem from increased political instability due to ongoing corruption allegations, and Brexit uncertainty, which could hit British tourist arrivals. FocusEconomics panelists estimate growth of 4.0% in 2020, which is down 0.4 percentage points from last month’s forecast, and 3.8% in 2021.

Malta Economy Data

2014 2015 2016 2017 2018
Population (million)0.40.40.40.50.5
GDP per capita (USD)23,92426,38724,50025,48927,739
GDP per capita (EUR)18,07119,83021,94822,98224,576
GDP (USD bn)10.111.310.811.512.8
GDP (EUR bn)7.68.59.710.311.3
Economic Growth (GDP, annual variation in %)4.68.710.85.66.8
Consumption (annual variation in %)2.02.55.12.43.5
Investment (annual variation in %)1.37.055.7-0.3-7.5
Exports (G&S, annual variation in %)0.94.115.54.55.4
Imports (G&S, annual variation in %)0.00.218.11.60.4
Industrial Production (annual variation in %)-4.7-5.7-0.2-6.98.3
Unemployment Rate6.15.75.44.74.0
Fiscal Balance (% of GDP)-2.4-1.7-1.00.93.4
Public Debt (% of GDP)68.463.457.955.550.2
Inflation Rate (HICP, annual variation in %, eop)1.00.41.21.01.3
Inflation Rate (HICP, annual variation in %)1.00.81.20.91.3
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)2.03.13.66.312.3
Current Account Balance (EUR bn)0.20.30.40.71.4
Trade Balance (EUR billion)-1.1-1.2-2.0-2.0-1.5

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Malta Facts

Value Change Date
Bond Yield0.433.09 %Dec 30
Exchange Rate1.120.65 %Dec 31

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