From new insights, Malta has ranked fastest growing economy in Europe of 2024. The European Commission has forecasted that after achieving a 5.0% GDP growth in 2024, Malta is expected to maintain a 4.3% growth rate in both 2025 and 2026.
But what are Malta’s secrets to this success?
- Strong Domestic Demand: There is a very noticeable increase in both private and public consumption. The strong labour market and the rise in real wages are strengthening domestic consumption.
- Tourism Sector Recovery: Malta continues to see growth in tourism arrivals, with a reported 21.1% increase in tourist flow from January to August 2024 compared to the same period in 2023. This sector is crucial as it contributes to both consumption and exports
- Export Performance: Exports, particularly in the services sectors, continue to grow faster than imports, and are making a positive contribution to the overall economic growth of the country.
Employment was growing to 4.3% in 2024, driven by high immigration flows addressing labour shortages. Although employment growth is expected to decelerate slightly to 3.1% in 2025, the unemployment rate is anticipated to remain low at around 3.2% in 2024, decreasing marginally to 3.0% by 2026.
Even Inflation which is forecasted at 2.5% this year, will thanks to the stability of energy prices and other subsidy measures fall even lower to 2.2% in 2025 and 2.0% in 2026. The government deficit shrunk further from 4.0% in 2024, expecting to reach 3.5% of GDP in 2025. This improvement is partly due to a decrease in subsidies, while spending on energy price support is set to stay the same. Government expenses, including salaries, social benefits, and public projects, will likely decrease compared to GDP. On the other hand, tax revenues from personal income are predicted to drop because of changes to the income tax system.
Investment growth is also set to recover after a significant slowdown but is projected to recover with a growth of 4.5% in 2025. This recovery is supported by the ongoing absorption of funds from the Recovery and Resilience Facility, which supports additional impulse to investments.
Malta’s remarkable economic performance isn’t just a number; it’s a reflection of a thriving and adaptable market. With strong domestic demand, a booming tourism sector, and a strong export performance, Malta has firmly established itself as Europe’s fastest-growing economy for 2024. For professionals and businesses alike, this growth translates into exciting opportunities. The labour market remains reliable, with low unemployment rates and continuous demand for talent across various sectors. Whether you’re a professional looking to grow your career in a thriving market or a business seeking to tap into Malta’s dynamic workforce, the time has never been better to make your move. Let’s shape your future together in Europe’s fastest-growing economy.