The Central Bank of Malta has revised its 2025 GDP growth forecast upwards to four per cent, reflecting stronger domestic demand and net exports. However, while the economy remains resilient, the overall growth trend is set to moderate in the coming years, reaching 3.3 per cent by 2027.
Private consumption is expected to be a key driver, fuelled by tax reductions and stable employment rates. However, the contribution of net exports to GDP will gradually decline. The unemployment rate is projected to settle at three per cent, reflecting a still-tight labour market, while wage growth is expected to ease from sic per cent in 2024 to 3.5 per cent in 2027, reducing pressure on business costs.
Inflation is forecast to continue its downward trend, reaching two per cent by 2027, while the Government deficit-to-GDP ratio is projected to improve, dropping below three per cent after 2025. However, risks remain, particularly related to global trade uncertainties, geopolitical tensions, and potential fiscal pressures.
Despite these challenges, Malta’s economic fundamentals remain strong. Businesses can expect a stable environment for investment, with opportunities arising in sectors benefiting from consumer-driven growth and increasing private investment.
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