Gozo Growth Momentum To Continue, Says Oxford Economics

Gozo’s short-term economic outlook remains positive, with forecasts pointing to continued growth across key sectors, particularly tourism and services. The projections, prepared annually by Oxford Economics using regional data, the Gozo Business Sentiment (GBS) survey, and analysis by the Gozo Regional Development Authority (GRDA), indicate that the island’s economy is maintaining strong momentum following a favourable performance in 2024.

While official GDP figures for 2024 are still pending, findings from the latest GBS survey show that business sentiment across Gozo was largely optimistic. This positive outlook is supported by increases in tourism and transport activity between the islands. Oxford Economics projects Gozo’s real GDP to expand by 3.9% in 2025, driven mainly by rising tourism, domestic consumption, and sustained private investment.

Growth is expected to remain steady in subsequent years, with forecast rates of 3.5% in 2026 and 3.4% in 2027, supported by public investment and infrastructure projects under the Sustainable Urban Development Fund.

From a sectoral perspective, services are projected to lead output growth in 2025, particularly in accommodation and food services, transport, real estate, and professional activities. Industry and manufacturing are also expected to contribute positively, reflecting an expansion in construction and production.

The latest forecasts include a slight upward revision from the previous year, reflecting stronger-than-expected investment trends and improving business confidence.

The labour market in Gozo continues to perform well, supported by a steady rise in employment. Jobs are projected to increase by 5.0% in 2025 before moderating to 2.3% in 2026 and 2.0% in 2027. Employment gains are concentrated in the services sector, especially within administrative, professional, and information-related activities. Despite ongoing labour shortages in certain roles, unemployment is expected to remain at historically low levels throughout the forecast period.

Tourism remains a key engine of growth. In 2024, inbound tourism rose by 13.0%, with total arrivals reaching 179,695. Overnight stays by inbound visitors increased by 2.0%, while domestic nights grew by 6.5%, reflecting continued interest from local residents. Although inbound figures remain slightly below pre-pandemic levels, full recovery is anticipated by the end of 2025.

Over the 2026–2027 period, both domestic and inbound tourism are expected to sustain positive growth, reinforcing the sector’s importance to Gozo’s economy. The overall outlook is one of resilience, with continued expansion supported by strong consumer activity, business confidence, and targeted public investment that will help maintain Gozo’s growth trajectory in the years ahead.

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