Malta’s growth eases in 2025 as productivity slows – PwC

PwC Malta’s recently published economic update points to a moderation in growth and a slowdown in productivity in Malta, highlighting important considerations for policymakers and business leaders.

The report provides a comprehensive look at Malta’s economic performance in 2025 and the trends shaping the future, while noting that Malta continues to lead in the euro area.

The recent analysis unveiled how Malta’s GDP growth slowed to 4 per cent in 2025, down from 6.2 per cent the previous year. The country’s growth is still significantly stronger than the euro area’s 1.4 per cent in 2025, which improved from 0.9 per cent in 2024. But the gap between Malta and the euro area is narrowing, PwC said.

“On a per-capita basis, the convergence is more evident. GDP per capita increased by 1.6 per cent and consumption per capita by 1.2 per cent in 2025. This aligns with euro area averages and indicates a shift from exceptional to more moderate growth.”

The most notable finding is the slowdown in productivity.

Gross value-added (GVA) per worker grew by only 1.4 per cent in 2025, compared to 5 per cent in 2024.

“With GVA per worker now at approximately €67k, compared with around €83k in the euro area, this slowdown prompts questions about the sustainability of Malta’s long-term growth advantage,” PwC said.

 The report highlights a structural imbalance: some of the fastest-growing sectors are among the least productive, while higher value-added sectors are underperforming.

From a sectoral gross value-added (GVA) perspective, Malta’s 2025 growth reflects positive performance in the ICT sector, the wholesale and retail industry (which includes hotels), and the public sector. On the other hand, professional services, finance, construction, and arts and recreation all experienced slower growth of below 2 per cent, while manufacturing and real estate were more or less flat, PwC said in its report.

“Productivity by sector remains uneven, with ICT leading at €162k GVA per worker, followed by professional services (€93k) and finance (€76k). Wholesale and retail, construction, and the public sector are at the lower end of the value-added spectrum.”

Lucienne Pace Ross, Territory Senior Partner at PwC Malta, said: “Our most recent economic update depicts an economy that is resilient yet recalibrating. Malta continues to outpace its European peers, but the combined effect of slowing headline growth, flattening per-capita indicators, and weaker productivity gains suggests that the drivers of past growth are losing steam. To sustain long-term competitiveness, Malta must focus on improving productivity and supporting higher value-added sectors.”

Cover photo by PwC