Government Launches Pre-Budget 2026 Document

Finance Minister Clyde Caruana has presented the Pre-Budget 2026 Document, highlighting Malta’s strong economic performance despite five years of international challenges.

Caruana noted that the country’s finances remain solid, allowing government to prepare another “responsible and positive Budget”. He pointed to forecast growth of 4.1% in 2025 and 4.0% in 2026, well above the EU average of 1.1% and 1.5%.

Malta also leads the EU in labour participation, with a rate of 82.1% compared to the EU’s 75.3%, and recorded the highest employment rate in Europe at 84.1% in early 2025. Unemployment in Malta stands at 2.5%, the lowest in the EU.

Inflation is projected to fall to 2.3% this year and 2.0% in 2026. Meanwhile, tax revenue grew from €5.9 billion in 2023 to €7.2 billion in 2024, driven by increases across all tax categories. Capital expenditure rose to €1.14 billion, with recurrent expenditure also growing, largely due to wage agreements and new initiatives.

Subsidies on food and energy have been reduced, easing from 1.2% of GDP in 2023 to a forecast 0.7% by 2026. Malta’s deficit is also on track to fall below the EU threshold of 3% of GDP by 2026, while debt levels are expected to remain under 60% of GDP, significantly below the EU average of 81.8%.

“Malta took wise decisions from the start of global crises, decisions which at the time were criticised but have since been recognised as the right choices,” Caruana said. “This will be a Budget that strengthens the economy while remaining fiscally responsible.”

The full Pre-Budget 2026 Document is available on the Finance Ministry’s website: finanzi.gov.mt.

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