46 times better than Germany

Malta's economy will grow by five times the European average this year.

In their latest economic report the European Commission’s experts revised down the Union’s economic growth to 1.0% this year from a previous forecast of 1.3%. The worst economic performance is expected in Estonia, with a 0.5% slowdown, followed by Finland, where the economy will not grow, and Germany, where GDP is expected to grow by 0.1%.

In contrast Malta’s economy, which was previously forecast to grow by 4%, is now forecast to grow by 4.6%. This means that Malta’s economy will grow by five times the European average this year. The country’s economic performance is expected to be 46 times better than that of the largest European economy, Germany.

Malta is in fact predicted to have the highest growth rate among all European Union countries both this year and next. Last year, grew by 5.6%, a rate of economic expansion fourteen times the European average.

In their analysis, commission experts described our country’s economic forecasts as the strongest, while employment growth “tops the ranking”. These results are driven by strong private consumption as well as a rebound in exports. These trends are expected to continue in the next years, while it is forecast that there will also be an increase in investment.

In Germany, Commission experts are predicting that the economy will remain weak. High energy prices are impacting households, with the latter ending up in a financial situation that does not allow rising consumption. Moreover, the increase in interest rates in foreign countries is also leading to a lack of investment on the part of companies. In contrast, in Malta, neither interest rates nor energy prices have risen, and this is boosting economic growth.

While upgrading economic growth forecasts for our country, the European experts felt they had to reduce their estimates of the inflation rate our country will face. This is now expected to be below 3% both this year and next, in contrast to previous forecasts. This means that the inflation rate is expected to halve. 

Another interesting fact that emerges from the report is that the European Commission forecasts that the Government’s deficit this year will be 4.3%. This is a much better forecast than the Maltese government’s. Developments in the national debt have also been revised downwards. While the Commission previously forecast that by 2025 the debt burden would be 57.2%, this forecast has now been reduced to 52.6%.

Photo: Petar Avramoski

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