Malta Economic Outlook

June 26, 2018

The economy continued to expand at a solid rate in the first quarter, after decelerating in the final stretch of 2017. GDP expanded 4.4% annually in Q1, broadly matching Q4’s 4.6% increase. Growth was underpinned by a pick-up in private consumption and a sizeable rebound in government spending. Moreover, the external sector’s performance improved, as imports fell at a more pronounced pace than exports, reflecting reduced imports of capital goods. Heading into Q2, tourist inflows soared in April, while unemployment dropped further. However, in the January–April period, the budget balance recorded a deficit on surging current spending.

Malta Economic Growth

Last year’s drivers of growth should continue to buttress activity this year: A strong tourism sector, buoyant private consumption and a tight labor market. Rising EU fund inflows should, moreover, lead to a rebound in fixed investment. In addition, the fiscal balance is expected to remain in surplus, albeit at a lower level due to rising current government spending. FocusEconomics panelists see growth of 5.1% in 2018, up 0.1 percentage points from last month, and 4.4% in 2019.

Malta Economy Data

	2013	2014	2015	2016	2017
Population (million)	0.4	0.4	0.4	0.5	0.5
GDP per capita (USD)	23,901	26,247	24,182	25,133	27,304
GDP per capita (EUR)	18,064	19,737	21,670	22,660	24,187
GDP (USD bn)	10.1	11.3	10.6	11.3	12.6
GDP (EUR bn)	7.6	8.5	9.5	10.2	11.1
Economic Growth (GDP, annual variation in %)	4.6	8.1	9.6	5.2	6.4
Consumption (annual variation in %)	2.0	2.3	5.1	2.8	3.9
Investment (annual variation in %)	1.3	6.8	56.8	1.7	-7.6
Exports (G&S, annual variation in %)	0.9	3.2	3.5	4.5	4.3
Imports (G&S, annual variation in %)	0.0	-0.2	7.1	1.5	-0.9
Industrial Production (annual variation in %)	-4.7	-5.7	6.0	-4.4	3.9
Unemployment Rate	6.4	5.8	5.4	4.7	4.0
Fiscal Balance (% of GDP)	-2.4	-1.8	-1.1	1.0	3.9
Public Debt (% of GDP)	68.4	63.8	58.7	56.2	50.8
Inflation Rate (HICP, annual variation in %, eop)	1.0	0.4	1.2	1.0	1.3
Inflation Rate (HICP, annual variation in %)	1.0	0.8	1.2	0.9	1.3
Inflation (PPI, annual variation in %)	-3.2	1.2	-3.4	-1.9	4.0
Policy Interest Rate (%)	0.25	0.05	0.05	0.0	0.0
Exchange Rate (vs USD)	1.38	1.21	1.09	1.05	1.20
Exchange Rate (vs USD, aop)	1.33	1.33	1.11	1.11	1.13
Current Account (% of GDP)	2.0	3.1	3.7	6.4	11.6
Current Account Balance (EUR bn)	0.2	0.8	0.5	0.8	1.4
Trade Balance (EUR billion)	-1.1	-1.1	-1.8	-1.9	-1.6

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Malta Facts

	Value	Change	Date
Bond Yield	1.33	3.09 %	Jul 17
Exchange Rate	1.17	0.65 %	Jul 17
Stock Market	4,374	0.36 %	Jul 17

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