Malta Economic Forecast

Malta Economic Outlook

September 1, 2020

Recently released national accounts data revealed that the economy was pummeled in the second quarter by the Covid-19 fallout, with GDP contracting at a record-breaking 16.2% year-on-year pace (Q1: +1.4% yoy) on suppressed domestic and foreign demand. Both fixed investment and private consumption were decimated as containment measures shut down activity, while exports collapsed amid travel restrictions and the vital tourism industry coming to a halt. Turning to Q3, although economic sentiment continued to improve in both July and August, primarily in the industrial and services sectors, consumers turned more pessimistic in August amid the reintroduction of some restrictions that same month due to a rise in coronavirus infections—hinting at a fragile recovery going forward.

Malta Economic Growth

The blow dealt by the pandemic will plunge the economy into a deep recession this year. Private consumption will suffer amid higher unemployment, while exports will reel as the crucial tourism industry, whose revenues account for nearly a fifth of GDP, gets hammered. Strong fiscal support, however, should help cushion the downturn somewhat. FocusEconomics panelists see GDP contracting 6.1% in 2020, which is down 0.1 percentage points from last month’s forecast, before expanding 6.3% in 2021.

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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