Malta Economic Forecast

Malta Economic Outlook

October 27, 2020

The economic recovery likely remained sluggish in Q3, on the heels of a staggering GDP contraction in Q2 caused by the coronavirus fallout. Although retail sales continued to rise month-on-month in July–August, growth remained only modest. Additionally, while the number of registered unemployed continued to decline from May’s peak through August, the level was still far above pre-crisis figures earlier in the year. This, coupled with consumers remaining deeply pessimistic in September following a spike in infections in the last two months of the quarter, bodes ill for private consumption. In other news, the government presented its 2021 budget to Parliament on 19 October, envisioning a fiscal deficit of 5.9% of GDP. The government’s sound fiscal management has enabled it to extend relief spending, notably the wage supplement, for some time next year.

Malta Economic Growth

After the coronavirus-induced slump this year, economic activity is seen rebounding robustly next year on the back of gradually recovering domestic and foreign demand. Nevertheless, rising Covid-19 cases domestically and throughout Europe, coupled with uncertainty surrounding the strength of recovery in the all-important tourism industry, clouds the outlook. FocusEconomics panelists see GDP expanding 6.0% in 2021, which is down 0.1 percentage points from last month’s forecast, and 5.2% in 2022.

Malta Economy Data

2015 2016 2017 2018 2019
Population (million)0.40.50.50.50.5
GDP per capita (USD)24,50025,55627,78330,54630,536
GDP per capita (EUR)21,94823,04424,61326,05727,375
GDP (USD bn)10.811.512.814.514.8
GDP (EUR bn)9.710.411.312.413.3
Economic Growth (GDP, annual variation in %)10.95.86.57.34.7
Consumption (annual variation in %)5.02.63.37.82.9
Investment (annual variation in %)55.6-0.2-7.1-1.86.2
Exports (G&S, annual variation in %)15.54.54.83.42.5
Imports (G&S, annual variation in %)18.11.6-0.53.03.0
Industrial Production (annual variation in %)-0.2-6.98.31.61.7
Unemployment Rate5.44.74.03.73.4
Fiscal Balance (% of GDP)-1.01.03.31.90.5
Public Debt (% of GDP)58.055.550.345.643.1
Inflation Rate (HICP, annual variation in %, eop)1.21.01.31.21.3
Inflation Rate (HICP, annual variation in %)1.20.91.31.71.5
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)3.66.312.310.610.5
Current Account Balance (EUR bn)0.30.41.21.41.3
Trade Balance (EUR billion)-2.0-2.0-1.5-1.4-1.6

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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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