Malta Economic Forecast

Malta Economic Outlook

May 3, 2022

After GDP growth cooled in Q4 2021 due to a weaker external sector, available data paints a mixed picture for Q1. A tighter labor market likely supported private consumption. Higher average economic sentiment in Q1 is expected to have buoyed private business activity. Inbound tourist numbers rose sharply in January and February in year-on-year terms. That said, the rate of tourist numbers growth in Q1 slowed from Q4’s blistering pace. Consumer confidence weakened sequentially and inflation accelerated, likely hitting private consumption. Meanwhile, industrial production remained subdued in January-February. Turning to Q2, a further loosening of restrictions from late March bodes well for activity. In politics, the Labor party won a third term in the general elections, signaling policy continuity. Reining in the EU’s highest fiscal deficit may require fiscal restraint.

Malta Economic Growth

The economy should record a healthy pace of growth this year, although a less favorable base effect will keep it below last year’s rate. A solid labor market, a recovering tourism industry amid falling Covid-19 restrictions in the EU, and EU funds will spur economic growth. The shadow of the Russia-Ukraine war and prolonged global supply constraints pose downside risks. FocusEconomics panelists see GDP expanding 4.6% in 2022, which is down 0.2 percentage points from last month’s forecast, and 3.4% in 2023.

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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