Rising unemployment reflects skills gap among Maltese workers, economist says

The latest unemployment statistics from the National Statistics Office (NSO) and Eurostat are painting a worrying picture for Malta, as unemployment continues to increase.

In fact, the latest Eurostat statistics showed that Malta recorded the largest increase in unemployment in the EU, while youth unemployment also saw a significant increase compared to other countries.

BusinessNow.mt spoke to economist Professor Philip von Brockdorff, who highlighted that the rise in unemployment, especially among young people, is “somewhat of a concern as this is probably reflecting low levels of qualifications and skills.”

On the other hand, Prof. von Brockdorff explained that economic growth remains relatively strong, meaning that “employers have a wider choice for recruitment than in the past and that there is no shortage of qualified persons especially from Asia willing to work in our economy.”

He also noted that businesses are constantly searching for ways to cut down on costs and increase productivity. Prof. von Brockdorff explained that “even though it may still be early days, the use of Artificial Intelligence (AI) in local businesses is already taking shape and that will restrict job opportunities for persons with very low skills.”

The same sentiment regarding the lack of skills in the Maltese workforce was also expressed by the Chamber of SMEs, which said that it is currently monitoring the situation.

Prof. von Brockdorff also noted that the fiscal challenges the Government is facing, as it continues to subsidise energy prices amid the eventual phasing out of the favourable corporate tax regime for foreign companies registered in Malta, will impact revenue flows.

This eventuality, according to Prof. von Brockdorff, “could have a bearing on future economic growth thereby acting as a drag on new employment opportunities.”