The Central Bank of Malta has updated its economic projections, revising its 2025 GDP growth forecast slightly upwards to 4 per cent. Although growth is expected to slow in subsequent years, domestic demand and private investment remain key factors in driving economic expansion. By 2027, GDP growth is forecast to reach 3.3 per cent, with inflation moderating to 2 per cent.

Private consumption is expected to play a major role in economic growth, driven by tax reductions and sustained employment levels. The unemployment rate is forecast to stabilise at 3 per cent, signalling a healthy labour market. Wage growth is set to moderate, easing business cost pressures while maintaining consumer purchasing power.

For investors, Malta’s stable economic outlook presents opportunities in various sectors, particularly in industries linked to consumer spending, infrastructure, and corporate expansion.

The Government’s deficit-to-GDP ratio is expected to decline below 3 per cent after 2025, further supporting a favourable investment climate.

Potential risks, such as global trade disruptions and geopolitical uncertainties, remain factors to watch. However, with strong domestic demand, a resilient labour market, and a stable fiscal trajectory, Malta continues to offer a reliable environment for both local and foreign investors.

Image Credit: Inigo Taylor