Malta’s public debt tops €11 billion

Malta’s public debt now stands above €11 billion, having increased by over €1 billion in the last year as recurrent deficits increase the need for Government borrowing.

New data released by the National Statistics Office (NSO) shows that Central Government Debt totalled €10.99 billion by the end of June 2025.

However, this does not factor in the recently completed issue of €400 million in Malta Government Stock (MGS), as Malta’s main sovereign debt instrument is called, which partly covered the redemption of €139 million in maturing debt.

This brings the total level of public debt to around €11.25 billion, almost double the €5.7 billion registered at the end of 2019 – before the COVID-19 pandemic, a supply chain crisis and an energy price shock forced elevated levels of public spending.

The Government expects to run deficits of more than €700 million for each of the next two years, so the total debt is likely to continue climbing.

However, the debt-to-GDP ratio, a key indicator of the sustainability of public finances, remains well below the 60 per cent limit established under EU rules, standing at 47.4 per cent at the end of 2024.

The apparent cost of debt, which is the interest rate applicable to the whole nominal debt, has meanwhile continued to fall, from 3.8 per cent in 2016 to 3.2 per cent in 2019, to 2.6 per cent at the end of 2024.

Malta’s public debt is predominantly held by local financial institutions and households, while foreign institutions hold just over a fifth (21.2 per cent) of the total. This represents a reduction from the 24 per cent held by external agents in 2021, but is nonetheless a major increase from the 16 per cent recorded in 2017.

Resident deposits held with local financial institutions reached an all-time high of €27.2 billion in May 2025, representing ample underutilised domestic capital that could continue fuelling Government spending.

The moderate debt-to-GDP ratio, the decreasing cost of debt, the largely domestic holding of public debt, and the high amount of resident deposits, combined with Malta’s status as the best-performing economy in the EU for three years running, indicate that Malta’s Government debt, while fast-growing, is not unsustainable.