About Malta

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 2016 ( Source; Central Bank of Malta )

Output, employment and prices

The Maltese economy continued to grow robustly during 2016, 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 2015, but remained high from a historical perspective. Labour Force Survey (LFS) data for the first three quarters of 2016 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 2016 the number of registered unemployed fell significantly on a year earlier. Price pressures in Malta remained muted compared with historical trends. The average annual rate of inflation based on the Harmonised Index of Consumer Prices (HICP) moderated to 0.9% in 2016, from 1.2% in 2015. Inflation based on the Retail Price Index (RPI) also eased, averaging 0.6% during the year under review, down from 1.1% a year earlier.

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Malta is ideally situated in the centre of the Mediterranean, located 90Km south of Sicily and 300Km north of Libya. Although it has a population of over 420,000 inhabitants it has over 1.8 million tourist arrivals each year.

Gross domestic product

Real GDP growth remains robust Real GDP increased by 5.0% during 2016, following a 7.4% increase in the previous year .Although the pace of expansion moderated, it remained much higher than that registered in the euro area . The rise in activity was primarily driven by net exports. Domestic demand also contributed positively to economic activity, although to a lesser extent. The increase in domestic demand reflected higher private consumption expenditure, as gross fixed capital formation (GFCF) and government expenditure contracted. Changes in inventories also contributed negatively to GDP growth. Exports of goods and services rose by 4.0% over 2015, a marginally lower rate of growth when compared with that recorded in the previous year. On the other hand, imports of goods and services increased by 1.1% during the review period, significantly lower than the 7.5% growth recorded in 2015.


The buoyant performance in the tourism sector observed since 2010 persisted during 2016. NSO data for 2016 show that tourist arrivals, nights stayed and expenditure surpassed the levels recorded in 2015. Compared with a year earlier, the number of inbound tourists grew significantly during 2016 as it rose at an annual rate of 10.2% compared with a 5.5% growth rate recorded in 2015 (see Chart 3.3). The total number of visitors rose to almost two million, 182,562 tourists more than a year earlier.

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