Minister Clyde Caruana has unveiled the 2025 pre-budget consultation document, highlighting Malta’s strong economic outlook, with growth projected to remain slightly above 4%, despite global challenges.

Malta continues to outperform the EU in labour force participation and boasts the highest economic growth rate among EU nations. Having made significant strides in female employment, the country is expected to lead in Employment Participation by the end of this legislative term.

Malta reached its 2027 employment target early, achieving an 80% rate by 2023, with unemployment among the lowest in Europe at 3.1%, compared to the EU average of 5.8%. Inflation is predicted to drop significantly over the next two years, stabilizing around 2%.

Increased tax revenues, driven by strong domestic demand, corporate profits, and employment growth, have strengthened Malta’s fiscal position, with rising compliance rates further boosting government finances.

Capital expenditure has increased due to infrastructure projects and investments, while recurrent spending is fueled by subsidies, healthcare, social programs, and green energy initiatives. Food and energy subsidies, which accounted for 1.4% of GDP in 2022, will continue but are expected to decrease as inflation eases.

Malta’s fiscal strategy for 2025 will align with the EU’s revised governance framework, aiming to reduce the deficit below 3% of GDP and keep the Debt-to-GDP ratio under 60%.

Minister Caruana assured that Malta’s economic strength will allow for another positive, socially just budget that supports families and businesses while maintaining stability.

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