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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Malta is considered a high-income country and an innovation-driven economy. Thanks to its sound financial foundations, large infrastructure projects and buoyant domestic demand, the country emerged from the euro area crisis better than most EU Member States, registering one of the highest real GDP growth rates in recent years. Nevertheless, Malta’s economy relies heavily on the tourism sector and international trade, thus it was severely affected by the outbreak of the COVID-19 pandemic and the restrictions that followed. After a considerable drop in 2020 (-8.3%), real GDP growth is estimated to have rebounded strongly to 5.7% in 2021 (IMF), supported by a better performance of the tourism sector, as well as by domestic consumption and investment. The economy is expected to reach its pre-pandemic levels by mid-2022, with overall growth reaching 6% over the year (underpinned by the implementation of the EU Recovery and Resilience Plan), followed by 4.9% in 2023.

Malta’s public finances have been significantly consolidated in recent years, with the government budget turning positive. However, in the last couple of years national authorities had to deploy a series of measures to mitigate the effects of the pandemic, including wage support and voucher schemes, healthcare-related outlays and utility and rent subsidies for businesses. Although tax revenues partially recovered, in 2021 the budget deficit was estimated at 9.3% by the IMF. As the economy continues its recovery and support measures are phased out, the deficit is projected to decline to 5.2% of GDP this year and 4.2% in 2023. After decreasing from above 70% to around 50% in five years, the debt-to-GDP ratio surged to 63% in 2021, and is expected to follow an upward trend over the forecast horizon (65.3% and 66.5% in 2022 and 2023, respectively). Headline inflation stood at 0.7% in 2021; the increase in food, transport and imported goods prices is set to drive up price pressures in 2022, with inflation projected at 1.8%.

Unemployment in Malta continues to be among the lowest in the EU, with a continuous decrease in unemployment has been witnessed for all age groups and categories in recent years. In 2021, unemployment stood at 3.6% (from 4.3% one year earlier), thanks to the positive contribution of the professional services, construction, and public sector. The IMF forecasts a stable level in the short term (at 3.5%). Increasingly, the EU and non-EU European migrants are relocating to Malta for employment, though wages have remained low compared to other European countries. Nevertheless, one in five people in private households in Malta was at risk of poverty and social exclusion in 2020, according to the latest data by Eurostat.

Main Indicators 202020212022 (e)2023 (e)2024 (e)
GDP (billions USD) 14.9217.38e17.1617.7418.69
GDP (Constant Prices, Annual % Change) -8.310.
GDP per Capita (USD) 2833e323335
General Government Balance (in % of GDP) -6.6-7.3-6.0-4.9-3.1
General Government Gross Debt (in % of GDP) 53.456.457.058.258.4
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -0.43-0.85-0.53-0.40-0.33
Current Account (in % of GDP) -2.9-4.9-3.1-2.2-1.7

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.



Main Sectors of Industry

Malta, the smallest economy in the Euro-zone, has one of the most skilled and less expensive labour forces in Europe, flexible and multilingual. Its economy is highly industrialised and service-based, while the agricultural sector only represents 0.6% of the GDP and employs around 1% of the workforce (World Bank, latest data available). Malta produces less than a quarter of its food needs, has limited freshwater supplies and scarce energy sources. The main crops are potatoes, green peppers, grapes, cauliflower, tomatoes, wheat, barley, and citrus. According to the latest figures from Eurostat, the agricultural sector registered an estimated contraction of 4.5% in 2020, mostly due to the COVID-19-induced crisis. This was the second-sharpest decline in the EU, after Romania.

The industrial sector employs 18.9% of the workforce and represents 13.4% of the GDP. Malta does not have any mineral or energy reserves and is thus completely dependent on imports in this field. Its economy is primarily based on manufacturing, especially microchips and pharmaceutical products. The World Bank estimates that the manufacturing sector accounts for 7.7% of GDP, though it contracted by an estimated 5% in 2020 amid the COVID-19 crisis (National Bank of Malta, latest data available).

Malta has put a lot of hard work into promoting its services and succeeded to become one of the main service centres in the Mediterranean region. The tertiary sector represents 76.1% of the GDP and employs 80.1% of the workforce. The financial sector manages assets equivalent to more than 500% of GDP and contributes about 15% of public revenues. Malta was the first EU state to regulate the online gaming industry and has established as a significant iGaming hub in the region. The tourism sector is the economic engine of the country, and its direct contribution to GDP (around 27%) is among the highest in the EU. The sector was strongly affected by the COVID-19 crisis and has been slowly recovering: preliminary data from the national statistical office show that during the first nine months of 2021, total tourist trips increased by 7.4% over the same period one year earlier. The national banking system comprises 27 banks, only three of which are Maltese majority-owned; as such, around 62% of the banking sector’s total assets of around EUR 40.4 billion are foreign-owned (EBF).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.0 18.9 80.1
Value Added (in % of GDP) 0.4 12.8 77.7
Value Added (Annual % Change) 0.5 n/a n/a

Source: World Bank - Latest available data.

Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.



Foreign Trade

Centrally located in the Mediterranean, Malta has for a long time portrayed itself as a bridge between Europe and North Africa. Its economy relies heavily on foreign trade, principally with Europe. International trade represents 271.5% of the GDP (World Bank, latest data available), one of the highest rates in the world. Malta exports mainly mineral fuels, lubricants and related materials (27.2%), machinery and transport equipment (24.3%), and chemical products (17.7%); importing mostly machinery and transport equipment (38.2%), mineral fuels, lubricants and related materials (21.6%), and chemicals (18.9% - NSO, 2021).

The country’s main trading partners are Germany (10.2%), Italy (5.5%), France (4.5%), and the UK (3.1%); whereas the main import origins are Italy (20.7%), the United Kingdom (7.6%), France (6.1%), and Spain (5.4% - data by NSO, 2021). Overall, the EU accounts for 35.4% of total exports and 53.8% of imports.

Malta has a structural trade deficit in terms of merchandise: in 2020, the country exported USD 2.6 billion worth of goods, importing USD 5.2 billion. Malta, however, is a service hub and thus a net commercial services exporter: in 2020 the island exported USD 15.8 billion worth of services (-6.1% y-o-y), importing USD 13.2 billion (+3.2%). In the same year, the overall trade balance for goods and services was estimated to be positive by the World Bank, at 9.6% of GDP (down from 14.8% one year earlier). According to the latest figures from the NSO, in 2021 total exports of goods stood at EUR 3.4 billion (-3.5% y-o-y), against USD 6.4 billion of imports (+18.6% y-o-y).

Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 5,8096,7697,0725,2236,656
Exports of Goods (million USD) 2,5163,1923,0072,6803,111
Imports of Services (million USD) 9,69412,33512,79413,20714,680
Exports of Services (million USD) 13,69816,37016,84715,81618,095

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 290.8273.0275.3291.5287.7
Trade Balance (million USD) -1,661-1,746-1,852-1,515-2,819
Trade Balance (Including Service) (million USD) 2,3682,3832,1951,198749
Imports of Goods and Services (Annual % Change)
Exports of Goods and Services (Annual % Change) 8.7-0.47.0-3.89.0
Imports of Goods and Services (in % of GDP) 136.1127.8129.2139.3136.9
Exports of Goods and Services (in % of GDP) 154.7145.2146.1152.2150.7

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change)
Volume of imports of goods and services (Annual % change)

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

International Economic Cooperation
Malta is member of the European Union and Euro zone.

Main Partner Countries

Main Customers
(% of Exports)
Germany 17.0%
France 9.0%
Italy 6.8%
Hong Kong SAR, China 5.7%
Singapore 5.5%
See More Countries 56.0%
Main Suppliers
(% of Imports)
Italy 20.2%
United Kingdom 8.3%
China 7.9%
France 7.0%
Germany 6.6%
See More Countries 49.9%

Source: Comtrade, Latest Available Data



Political Outline

Current Political Leaders
President: George VELLA (since 4 April 2019)
Prime Minister: Robert ABELA (since 13 January 2020)
Next Election Dates
Presidential: April 2024
House of Representatives: 31 July 2022
Main Political Parties
Since World War II, the political culture in Malta has been chiefly dominated by a two-party system. These two political parties are:

- Malta Labour Party (MLP): centre-left, social democratic party
- Nationalist Party (PN): centre-right, Christian democratic party

Other parties include the AD+PD, a centrist political party, formed by the merger of the two most prominent third parties, the green Democratic Alternative (AD) and the social liberal Democratic Party (PD); the conservative Alleanza Bidla; and the pan-European Imperium Europa.
Executive Power
The President is the chief of state and is elected by the parliament for a five-year term. The Prime Minister is the head of the government and enjoys the executive powers which include implementation of law and running the day-to-day affairs of the country. The leader of the majority party or majority coalition is appointed as Prime Minister by the President to serve a five-year term. The Cabinet is appointed by the President on the advice of the Prime Minister.
Legislative Power
The legislature is unicameral. The parliament consists of the House of Representatives having a minimum of 65 seats; its members are elected by popular vote on the basis of proportional representation to serve five-year terms. In case a political party wins an absolute majority of votes but does not have a majority of seats, then that party is given additional seats to ensure a parliamentary majority. President can dissolve the parliament on the advice of the Prime Minister or alternatively parliament can dismiss a government by passing a no-confidence motion.


COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Malta, please visit the website of the Ministry of Health, which provides figures regarding age and gender distribution. For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Malta and the current sanitary measures in vigour, please consult the the official portal, including the up-to-date information on the containment measures put in place and public health recommendations. Further info can be found on the website of the Ministry of Health.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

Following the measures taken by the European Commission, an export license is required to export personal protective equipment outside of the European Union.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Malta on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

To know about the economic measures taken by the Maltese government to address the impact of the COVID-19 pandemic on the national economy, please visit the website of the government’s agency Malta Enterprise. For information on social security benefits, refer to the website The website of the Commissioner for Revenue provides details concerning the “Covid Wage Supplement Scheme”; while the portal of the Malta Development Bank provides info on the “Guarantee scheme”.
The information on the EU’s economic response to COVID-19 and the actions to minimise the fallout on the EU member states’ economies of the COVID-19 outbreak is available on the websiteof
the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Maltese government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Malta in the
IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support schemes and taxation measures established by the Maltese authorities to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the website of the government’s agency Malta Enterprise. An overview of the measures is available on the dedicated page by Deloitte.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

For updated information on specific initiatives and support programs for businesses put in place by the Maltese government following the COVID-19 epidemic outbreak, please consult the website Malta Enterprise.
The European Commission adopted a
Temporary Framework for State aid measures to support the economy in the COVID-19 outbreak, which enables short-term export credit insurance to be provided by the member States where needed.