Malta’s Economy Grew By 4.0% In 2026 Amid Tourism Boom, EU Commission Finds

Malta’s economy maintained strong growth momentum in 2025, with real GDP expanding by 4.0%, the European Commission reported.

Growth was supported by resilient domestic consumption and a buoyant tourism sector, alongside strong performance in services such as financial, IT and professional activities.

Net exports contributed positively, as services exports outweighed the goods deficit. Growth is expected to moderate to 3.7% in 2026 and 3.6% in 2027 as external demand softens and labour constraints become more binding.

Private consumption is forecast to remain robust, increasing by around 3.3% in 2026 and 3.5% in 2027, supported by moderate real wage growth.

Government consumption, after strong expansion in 2025, is set to slow but will still contribute meaningfully to activity. Investment is expected to recover, driven by public projects, following a temporary contraction.

Employment growth remains positive but is slowing, reflecting tight labour market conditions and continued shortages despite inflows of foreign workers. Unemployment is expected to stay very low at around 3%.

Inflation is projected to rise to 2.7% in 2026 due to higher imported energy costs feeding into transport, food and services, although domestic energy prices are held stable through government measures.

Public finances remain relatively stable. The deficit declined to 2.2% of GDP in 2025 and is forecast to remain around this level in 2026 before edging down to 2.1% in 2027. Public debt is expected to stabilise at around 46% of GDP over the forecast horizon.

#MaltaDaily