Malta Foreign Direct Investment (EUR bn)

Foreign Direct Investment in Malta

Following a slowdown in year-on-year GDP growth in Q4 2022, the economic picture for Q1 looks fairly bright. In January-March, industrial production increased at a faster year-on-year pace, and tourist arrivals almost doubled compared to the same period in 2022. Additionally, both consumer and broader economic sentiment strengthened from Q4. That said, inflation remained high, averaging 7.0%. Moving to this quarter, a further improvement in business and consumer sentiment, coupled with falling inflation in April, bodes well for activity, although tighter financing conditions will be restraining growth. Meanwhile, data for January–April shows the budget recorded a narrower deficit compared to the same period of 2022. The improvement was mainly driven by significant increases in revenue from income and value-added taxes, which hints at resilient spending amid sustained inflation.