Malta’s strong economic performance is increasingly being matched by policies designed to ensure that growth translates into tangible benefits for families, workers, and pensioners across the country.

During 2025, Malta’s economic growth topped the list among all countries in the European Union, with final figures expected
to be three times the EU average. This performance is not a one-off achievement, as EU forecasts indicate that the trend is
expected to continue into 2026.

Malta’s strong showing across its major economic drivers is now projected to deliver growth of around 4% . At the same time,
the national deficit is expected to fall below 3%, possibly reaching 2.8% of GDP, compared to a European average of 3.3%.

Statistics in financial reports often remain abstract for the general public. In many countries, even strong economic figures fail
to resonate with citizens because the wealth generated is not felt in everyday life. People sense that prosperity is flowing
elsewhere while their own financial pressures remain unchanged. Malta’s stated policy takes a different approach. The
guiding principle is that the population deserves to benefit directly from the fruits of its labour, with government playing an
active role in guiding the economy and absorbing the strain of economic fluctuations.

In contrast, some countries shift the burden of economic downturns onto their citizens, with budgetary decisions moving away from what people experience as real needs and towards what political leaders determine from a distance. Malta’s approach seeks to avoid this disconnect.

The financial plan published on 25 October 2025 reflects this philosophy. During 2025 alone, families benefited from
substantial tax cuts that left €140 million in households’ pockets. This year’s Budget increases that support further, with €160
million earmarked over three years for families with children.

All income levels will benefit from the widening of tax bands, with the Government planning to extend the tax-free bracket to cover 80% of taxpayers within the next five years. The annual increase in the minimum wage will result in a rise of €8.24 per
week, bringing it to €221.78 per week. The minimum wage remains exempt from income tax.

While incomes are rising, economic and social realities can erode purchasing power if left unchecked. Recognizing this, the
Government has committed to maintaining energy price subsidies, keeping Malta’s energy prices among the lowest in
Europe. This support comes at an approximate cost of €460 million, providing stability and predictability for families and
businesses alike.

Family remains at the heart of national policy. Financial support is available for newly married couples, for the birth of children, with payments increasing for each additional child, for IVF treatment, and through higher allowances for fostering. These measures reinforce the belief that strong families require solid economic foundations.

Pensions have once again been increased, with a rise of €8 per week, and all pension increases remain exempt from income
tax. Children’s allowances have also been strengthened, with an increase of €250 per child for families earning under
€30,000, and an additional €167 per child for families earning under €23,000. Families whose children continue their
education beyond compulsory schooling receive a special allowance of €1,500 spread over three years, aimed at
encouraging progression beyond secondary education.

The consistent use of Malta’s financial strength to support a better quality of life underpins national budgetary planning. While
tax cuts dominate headlines, numerous other sectors receive targeted support designed to address specific needs across
society.

According to Business News on 29 December 2025, and forecasts from the UK-based Centre for Economics and Business
Research, Malta is on track to become one of the world’s top 15 richest countries per capita by 2040, climbing ten places in
global rankings. This is welcome news. The critical question, however, lies in how wealth is distributed. Does it benefit only
faceless interests, or does it reach the people who generate it? Is there a fair balance between investors, planners and
workers, and does prosperity translate into lasting well-being for entire communities?

Answering these questions is what turns charts and figures into lived reality. The choices made today will determine whether
economic success delivers shared prosperity or leaves future generations facing missed opportunities.