Get up to speed with Malta’s Economic Performance
Malta’s positive economic performance continued throughout the first half of 2018 with a number of positive economic indicators confirming this. This article will highlight Malta’s performance in some main indicators.
During the first quarter of 2018, Malta’s economy expanded by 4.8% compared to the previous year. This contrasts with the 2.5% and 2.4% average growth experienced by the euro area and European Union respectively. Malta’s economic growth was mainly driven by strong domestic demand, in turn reflecting a strong labour market. Malta’s service-based economy continued to grow at a fast pace with strong contributions coming in from tourism, remote gaming as well as financial services. Growth forecasts remain positive.
The labour market remains buoyant as numerous sectors continue expanding and demanding more human capital. In fact, employment growth for the first quarter of 2018 stood at 5.3% compared to the European average of 1.4% over a year earlier. Registered unemployed continued to decrease and in April 2018 the figure stood at 1,847 or 28.3% less than a year earlier. The labour market continues to tighten, and the availability of trained and skilled human resources will remain one of Malta’s main key challenges.
General government finance data issued for 2017 shows that Malta continued to register a surplus in its accounts. In fact, in its reporting under the Maastricht Treaty Malta registered a budget surplus of 3.9% of GDP, up from 1.0% in 2016. Debt continued to fall well below the 60% threshold and for 2017 it stood at 50.8%, down from the 56.2% registered in 2016. The forecasts for public finance continue to show a positive trajectory for Malta.
The HICP indicator for Malta in May 2018 edged up to 1.7% from 1.4% in April 2018. The increase stems mainly from the hotels and restaurant index due to seasonal variations and the usually-higher accommodation prices.
During the first four months this year, the trade deficit narrowed by €371.2 million when compared to the corresponding period of 2017, reaching €458.8 million. Imports show a decrease of €111.4 million, while exports increased by €259.8 million.
The number of tourists visiting Malta during the first four months of the year increased by 18.1% over the previous year. This increase also resulted in a 17.9% growth in nights spent in Malta coupled with a 10.3% increase in expenditure by tourists in Malta. These results are truly impressive and are having an overall positive impact on the Maltese economy.
Looking ahead, Malta’s economy continues to show positive signs. Malta remains an attractive jurisdiction especially for new sectors such as crypto and blockchain-related technology. The challenges remain primarily related to the tightening of the labour market. As various new infrastructural projects and private developments come on stream, it is expected that the economy will continue growing at this pace.