The harbor with boats in Malta

Malta Economic Forecast

Malta Economic Outlook

Year-on-year GDP growth slowed from 5.0% in Q1 to 3.9% in Q2. A softer expansion in household spending amid still-elevated inflation and a sharper contraction in fixed investment were behind the deceleration. On the flip side, exports of goods and services rebounded, aided by a recovering tourism sector. Data for Q3 points to resilient activity. The unemployment rate remained unchanged at 2.5% in July, and in the same month, inbound tourists were up 17.5% year on year. That said, economic sentiment averaged lower in July–August compared to Q2, as higher interest rates and declining, but still-elevated, inflation likely weighed on the economy. Meanwhile, in mid-September, Fitch Ratings affirmed the country’s ‘A+’ rating with a stable outlook, praising Malta’s significant debt reduction and strong growth.

Malta Inflation

Harmonized inflation fell to 5.0% in August from 5.6% in July, mainly due to falling transport prices and softer increases in recreation and culture. Inflation should continue its downtrend ahead amid higher interest rates and softer domestic demand. A wage-price spiral and commodity price spikes are upside risks.

This chart displays Economic Growth (GDP, annual variation in %) for Malta from 2013 to 2022.

Malta Economic Data

2018 2019 2020 2021 2022
Population (million) 0.5 0.5 0.5 0.5 0.5
GDP (EUR bn) 13.0 14.2 13.1 14.6 16.9
GDP per capita (EUR) 27,214 28,717 25,579 29,074 32,380
Economic Growth (Nominal GDP, ann. var. %) 8.5 9.5 -7.9 11.4 15.9
Economic Growth (GDP, ann. var. %) 6.2 7.0 -8.3 9.4 6.9
Private Consumption (ann. var. %) 10.0 4.0 -10.6 6.3 10.1
Government Consumption (ann. var. %) 12.4 13.2 15.8 6.1 2.4
Fixed Investment (ann. var. %) 5.2 11.8 -7.6 19.3 30.4
Exports (G&S, ann. var. %) 9.2 10.1 -5.6 8.2 6.4
Imports (G&S, ann. var. %) 11.1 11.2 -2.2 7.6 9.7
Industrial Production (ann. var. %) 1.9 1.4 -0.6 -0.3 3.1
Unemployment (% of active population, aop) 3.7 3.6 4.3 3.4 3.0
Fiscal Balance (% of GDP) 2.0 0.5 -9.7 -7.8 -5.8
Public Debt (% of GDP) 43.7 40.3 52.9 55.1 53.4
Inflation (HICP, ann. var. %, eop) 1.2 1.3 0.2 2.6 7.3
Inflation (HICP, ann. var. %, aop) 1.7 1.5 0.8 0.7 6.1
ECB Refinancing Rate (%, eop) 0.00 0.00 0.00 0.00 2.50
ECB Overnight Deposit Rate (%, eop) -0.40 -0.50 -0.50 -0.50 2.00
3-Month EURIBOR (%, eop) -0.31 -0.38 -0.55 -0.57 2.13
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (EUR bn) 0.8 0.8 -0.4 -0.8 -0.4
Current Account Balance (% of GDP) 6.4 5.3 -2.9 -5.1 -2.3
Merchandise Trade Balance (EUR bn) -1.5 -1.7 -1.4 -2.4 -2.9
Foreign Direct Investment (EUR bn) 3.4 3.4 3.4 3.4 -

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