Clyde Caruana forecasts small surplus by 2029

After Eurostat confirmed Malta’s 2025 deficit was significantly lower than initially forecast, Finance Minister Clyde Caruana said the country could return to a small surplus in the coming years.

Eurostat announced today that Malta’s 2025 deficit stood as a percentage of its GDP stood at 2.2 per cent, significantly lower than the 3.3 per cent originally forecast. 

Dr Caruana said the number would have been even smaller had the Constitutional Court not ordered the Government to pay €71.8 million (around 0.3 per cent of the GDP) in compensation to original shareholders of the National Bank. 

The results mean that Malta is well below the EU’s obligation for the annual deficit of member states not to exceed 3 per cent of their GDP.

Based on these new improved figures, Dr Caruana said the Government now expects to slash the deficit to 1.6 per cent this year, 1 per cent in 2027, and 0.4 per cent in 2028 before balancing the books – or even registering a small surplus – in 2029 and 2030. 

The Finance Minister said these numbers are based on “very conservative” estimates to account for prolonged uncertainty as a result of the Middle East war.

Malta last generated a surplus in its annual Government balance in 2019, the year before the COVID-19 pandemic, when it recorded a surplus equivalent to 0.7% of GDP.