Accra: An IMF mission, led by Nick Gigineishvili, has concluded discussions for the 2025 Article IV consultation with Malta.
According to International Monetary Fund, the statement highlights Malta’s economic resilience over the past decade, driven by robust tourism, online gaming, and professional services, boosted by foreign workers. Despite this growth, challenges such as an aging population and infrastructure pressure prompt a shift towards productivity-driven growth, as per Malta’s Vision 2050 strategy.
The report indicates a slowdown in growth from 6.8 percent in 2024 to an expected 3.9 percent in 2025, with tourism and domestic demand remaining strong. The medium-term growth potential is around 4 percent, while inflation is predicted to stabilize near 2 percent. Public debt is projected to stay at about 47 percent of GDP, with low distress risk. Unemployment is low, though labor shortages and skills mismatches are rising concerns.
The outlook acknowledges risks from geopolitical tensions, potential
EU slowdowns, wage pressures, and competition in the gaming industry. Policy priorities focus on strengthening resilience to shocks and advancing structural reforms to transition to a productivity-driven economy.
Fiscal policy aims to maintain prudent deficits and public debt while creating fiscal space for infrastructure, education, innovation, and green transition investments. The 2026 budget targets a deficit of 2.8 percent of GDP, down from 3.3 percent in 2025. Tax reform and energy price adjustments are among the measures to create fiscal space.
Malta’s banking system is robust, though real estate exposures require monitoring. Non-bank financial institutions are stable but should be watched for potential shocks. The regulatory framework has been strengthened, with progress in Malta’s AML/CFT framework, though vigilance is needed for emerging threats.
Structural reforms address labor market constraints through upskilling and reskilling. Judicial system improvements and innovation and digitalization sup
port are also priorities. The climate framework is being enhanced with projects like a second electricity interconnector to Italy and rooftop solar panel implementation.
National reforms could be amplified by EU-level measures, enabling Maltese firms to access larger markets.