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Economic Overview

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 is really sensitive to its external environment. After exceptional growth in 2022 (8.1%), real GDP growth is estimated to have remained strong at 6.1% in 2023. Private consumption and net exports grew strongly. By contrast, gross fixed capital formation declined, amid weaker construction activity in 2023 (EU Commission). In 2024, growth is projected at 3.3% by the IMF, driven by net exports and private consumption, which should continue to grow strongly even if at lower rates than in the previous two years. Investment growth is expected to pick up after the construction slowdown, and public consumption is set to remain strong. Growth in 2025 is forecasted at 3.5%.

Malta’s public finances have been significantly consolidated in recent years, with the government budget turning positive. However, in the last few years, national authorities had to deploy a series of measures to mitigate the effects of the pandemic and high energy and food prices, resulting in an increase in budget deficits (6.5% in 2022 and 5.6% last year, as per the IMF). Similarly, the debt-to-GDP ratio increased to 54.1% in 2023 from 52.3% one year earlier, and is projected to follow an upward trend over the forecast horizon, landing at 56.1% by 2025 (IMF), as sizeable fiscal deficits should be partially offset by continued strong nominal GDP growth. Inflation in 2023 reached 5.8%, despite government intervention keeping energy prices at 2020 levels. Inflation in 2024 and 2025 is forecasted at 3.1% and 2.2%, respectively, with ongoing pressures in food and services prices, while retail energy prices are expected to remain stable due to government intervention.

Unemployment in Malta continues to be among the lowest in the EU, with a continuous decrease in unemployment for all age groups and categories in recent years. In 2023, however, unemployment stood at 3.1% (from 2.9% one year earlier), with projections for a marginal increase over the forecast horizon (to around 3.3% by 2025). Increasingly, EU and non-EU European migrants are relocating to Malta for employment, though wages have remained low compared to other European countries. Nevertheless, 20.3% of the Maltese population was at risk of poverty and social exclusion in 2022, according to the latest data by Eurostat. Overall, the country's GDP per capita (PPP) was estimated at USD 55,928 in 2022 by the World Bank, above the EU average estimated at USD 54,249 for the same year.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 18.3720.9622.7424.0225.37
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 35,26438,67441,73843,87946,111
General Government Balance (in % of GDP) -5.9-5.3-4.9-4.2-3.6
General Government Gross Debt (in % of GDP) 51.651.853.655.056.3
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -0.550.400.570.640.67
Current Account (in % of GDP) -

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

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Main Sectors of Industry

Malta, the smallest economy in the Eurozone, boasts one of the most skilled, less expensive, flexible, and multilingual labor forces in Europe. Its economy is highly industrialized and service-based, while the agricultural sector only represents 0.9% of the GDP and employs around 1% of the workforce (World Bank, latest data available). According to the latest Census of Agriculture, in the period 2010-2020, the number of agricultural holdings decreased by 14.8%, to 10,449 (of which 41.4% produce solely for their own consumption). Malta produces less than a quarter of its food needs and has limited freshwater supplies and scarce energy sources; the main crops being potatoes, green peppers, grapes, cauliflower, tomatoes, wheat, barley, and citrus. Figures on the marketed output value produced by the agricultural sector in Malta during 2022 reveal an increase of 10.7% year-on-year to a total of EUR 135.5 million.

The industrial sector employs 17% of the workforce and represents 12.5% 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 more than 7% of GDP.

Malta has put a lot of hard work into promoting its services and succeeded in becoming one of the main service centers in the Mediterranean region. Nowadays, the tertiary sector represents 78.9% of the GDP and employs 82% of the workforce. The financial sector is the most important, managing assets equivalent to more than 500% of GDP and contributing about 15% of public revenues. Malta was the first EU state to regulate the online gaming industry and has become a significant iGaming hub in the region. The tourism sector is the economic engine of the country, and its direct contribution to GDP (around 15%) is among the highest in the EU. The sector was strongly affected by the COVID-19 crisis, but it has recovered: in 2023, the country welcomed a record number of inbound tourists, exceeding the 3 million mark, up by 8.3% compared to the 2019 figures (data Malta’s Tourism). The national banking system comprises 24 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. There are six core domestic banks, whose assets (just below EUR 26 billion) represent 200.6% of Malta’s GDP (EBF, latest data available).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 0.9 17.9 81.3
Value Added (in % of GDP) 1.0 12.3 78.8
Value Added (Annual % Change) 8.5 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 long portrayed itself as a bridge between Europe and North Africa. Its economy relies heavily on foreign trade, principally with Europe. International trade represents 318% of the GDP (World Bank, latest data available), one of the highest ratios in the world. Malta mainly exports machinery and transport equipment (31.1%), mineral fuels, lubricants and related materials (29.8%), miscellaneous manufactured articles (15.5%), chemicals (11.6%), and food (7.0%); whereas imports are led by machinery and transport equipment (36.5%), mineral fuels, lubricants and related materials (23.8%), food (10.4%), chemicals (10.0%), and miscellaneous manufactured articles (9.3% - data NSO, 2023).

Malta’s main import partners are Italy (19.8%), Germany (7.8%), France (7.8%), the UK (6.2%), Spain (5.6%), and the Netherlands (4.7%), with exports directed mostly towards Germany (18.7%), Italy (3.7%), Hong Kong (3.2%), the UK (2.2%), and Spain (1.6%). The majority of imports, accounting for 55.2%, originated from the European Union, with an additional 19.9% sourced from Asia. Likewise, exports were primarily aimed at the European Union, constituting 37.1%, while Asia received 16.9% (data NSO 2023).

Malta has a structural trade deficit in terms of merchandise: in 2023, the deficit narrowed by EUR 779.3 million compared to 2022, reaching EUR 4,061.2 million. Imports stood at EUR 8,577.5 million whereas exports reached EUR 4,516.3 million, representing decreases of EUR 934.3 million and EUR 155.0 million, respectively (table 1). Lower imports were mainly recorded in mineral fuels, lubricants and related materials (EUR 527.5 million), machinery and transport equipment (EUR 459.8 million), and chemicals (EUR 66.1 million), partly offset by increases in food (EUR 86.4 million) and miscellaneous manufactured articles (EUR 40.8 million). On the exports side, the main decreases were registered in mineral fuels, lubricants and related materials (EUR 176.9 million), food (EUR 73.6 million), and chemicals (EUR 47.1 million). These were partly offset by an increase in machinery and transport equipment (EUR 153.4 million – data NSO). On the other hand, the country is a net exporter of services (USD 21.8 billion in exports against USD 16.5 billion in imports in 2022, WTO).

Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 7,3885,7187,1338,5198,105
Exports of Goods (million USD) 3,1782,8373,0643,2533,468
Imports of Services (million USD) 12,86615,31617,09717,10218,936
Exports of Services (million USD) 16,91319,27621,94922,45224,835

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

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 307.4316.0343.4323.0324.6
Trade Balance (million USD) -1,755-1,614-1,389-2,277-3,597
Trade Balance (Including Service) (million USD) 2,2733,3902,5712,5751,534
Imports of Goods and Services (Annual % Change)
Exports of Goods and Services (Annual % Change) 10.810.1-
Imports of Goods and Services (in % of GDP) 144.6149.2165.0153.3156.6
Exports of Goods and Services (in % of GDP) 162.8166.8178.3169.7168.0

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (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 16.8%
Japan 7.7%
France 7.6%
Singapore 5.3%
United Kingdom 5.3%
See More Countries 57.4%
Main Suppliers
(% of Imports)
Canada 9.4%
France 6.6%
Spain 5.6%
Germany 5.1%
Greece 4.9%
See More Countries 68.4%

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: 2027
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 that took part in the latest elections 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 Eurofederalist and progressive pan-European Volt Malta; the far-right, Christian political party ABBA; and the right-wing populist, conservative People's Party.
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 the 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 (79 for the 2022-2027 legislature); 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

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) in Malta, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.