Another year of double-digit growth for Gozo

Gozo’s economy is now 16% above its pre-pandemic size.

The Gozitan economy grew by 13.4% during 2022, marking the second double-digit growth year for the sister island.

Despite initial fears that the pandemic would devastate Gozo’s economy due to its great dependence on tourism, official statistics indicate that, at €713 million, Gozo’s economy is 16% above its pre-pandemic size.

This growth has generated an increase of over 1,900 jobs, or 14%, on the island. This indicates that, while the economic growth was job-rich, the amount of GDP per worker also increased, signifying a higher level of labour productivity.

The bulk of the economic expansion in 2022 was driven by wholesale and retail, transportation, and accommodation and food services. These sectors accounted for nearly half of the increase in gross value added. Following the shock of the pandemic, which had seen output in these sectors plummet, we now have a sitation not just of full-blown recovery but of an expansion over the pre-pandemic situation.

At the same time, the manufacturing sector continued to expand, generating over a tenth of the increase in economic activity. Gozo’s manufacturing sector has grown strongly in recent years, so much so that gross value added in 2022 was close to two-thirds higher than what it was in 2018. This is double the growth rate observed across the channel, in Malta.

Construction activity also expanded, constituting nearly a fifth of growth, a fast rate which can explain why there has been so much discussion about the sector in Gozo. Slowing this growth down is one of the key principles of the ‘Gozo island of villages’ regional development strategy, and confirms the validity of the recent decision to stop the stamp duty concession for property purchases in Gozo.

That said, the bulk of economic growth in Gozo over the last years was not construction-driven. In fact, there has been a significant rise in high value-added services. For instance, professional services now have an output of €80 million when, just four years earlier, it was closer to €50 million. Similarly, remote gaming nearly doubled to €17 million. Information and communication expanded by nearly 10% to close to €25 million. 

At the same time, Gozo’s dependence on public administration, education, and health fell from 26% in 2018 to 24% in 2022.

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