Malta is classified as an advanced economy together with 32 other countries according to the International Monetary Fund (IMF). Since there are no natural resources in Malta, the country has had to rely on its favorable climate for tourism revenue in the past together with its proficient and well educated English speaking workforce to power its economy. While tourism has been the single most important factor for the economy in the past, the country has now strategically positioned itself as hub for financial services. The legal and tax system has therefore been optimized, to make Malta more interesting to companies that wish to do business here. This has resulted in unprecedented growth in the industry over the last few years, with the registration of hundreds of companies and the generation of thousands of jobs. Financial services already account for 12 per cent of Malta’s gross domestic product (GDP).
Economic data on Malta 2023 ( Source; Central Bank of Malta )
Output, employment and prices
The Maltese economy continued to grow robustly during 2023, extending the strong pace of activity recorded in recent years. Growth in real gross domestic product (GDP) was primarily driven by net exports, though domestic demand also contributed to growth, as higher private consumption offset negative contributions from government consumption, investment and changes in inventories. Sector data show that services continued to be the main driver of growth in gross value added (GVA). The strongest contributions were recorded in the sectors incorporating professional and scientific activities, arts and entertainment, and public administration. The manufacturing sector also contributed positively, though to a lesser extent. In contrast, GVA in the construction sector declined from the peak recorded in 2022, but remained high from a historical perspective. Labour Force Survey (LFS) data for the first three quarters of 2023 show that, against the backdrop of a buoyant economy, employment continued to rise and unemployment fell further, with the unemployment rate reaching a new low. These favourable labour market developments are corroborated by data based on administrative sources, which show that on average, in 2023 the number of registered unemployed fell significantly on a year earlier. Price pressures in Malta remained well below the EU average. HICP inflation in 2023 reached 5.6%, despite energy prices being kept at 2020 levels by government intervention. Inflation in 2024 and 2025 is forecast at 2.9% and 2.7% respectively, with continuing pressures in food and services prices while retail energy prices are set to remain stable due to government intervention.