Finance Minister Clyde Caruana confirms €12.81 COLA for 2024

Minister for Finance Clyde Caruana confirmed during a Business Breakfast event, organised by The Times of Malta (TOM) that the Cost Of Living Adjustment (COLA) for 2024 is that of €12.80 per week. This amounts to more than €50 a month (based on four weeks) per employee, to be shouldered by the employer.

The COLA is an allowance adjusted on a yearly basis, reflecting a cost-of-living index. These calculations are based on the prices of 40 essential goods such as food, water, electricity and clothing among others. These items are consistently tracked to assess the inflation rate which would need to be adjusted as the cost of maintaining a certain standard of living.

Initially, COLA was expected to be around €13 a week, a substantial increase from 2023’s COLA, that of €9.90 per week. Despite being slightly lower than projected, the 2024 COLA remains significant.

Answering questions through a Q&A with TOM editor Hermann Grech, Minister Caruana stated that COLA will remain on the high side even in 2025. Nonetheless, Mr Caruana did not express concern as the Government “is not seeing any wage-price spirals.”

“Its true prices have increased, leading to an increase in profits. But now as COLA rises, wage bills will increase and employers will react by lowering their profit margins,” Minister Caruana explains.

On the other hand, Minister Caruana said that with 2024's COLA the Government will be spending an additional €100 million on pension, whilst new collective agreements will cost the Government an additional €70 million.