Malta: top performer in global economic growth

Malta boasts the fasting growing advanced economy in the world, according to forecasts by the IMF.

The International Monetary Fund’s latest World Economic Outlook, launched last month in Washington, forecasts that Malta will have a real economic growth rate of 5% this year. This is the highest rate forecast amongst all economies considered to be advanced economies by the Fund.

On average, advanced economies are expected to grow by 1.7% this year, while the euro area is forecast to expand by a mere 0.8%, or less than one sixth Malta’s rate. The second fastest economy is expected to be Taiwan’s, with a growth rate of 3.1% or a third less than Malta’s. Malta is also growing much faster than economic giants like the US, South Korea, and Japan.

The World Economic Outlook sees Emerging and Developing Asia as the fastest growing region in the world, with a projected average growth of 5.2%. The biggest economy in this block is China, which the IMF expects will grow by 4.6%. Malta has been consistently growing at a faster rate than China since 2020.

Projected real GDP growth

Malta5.0%
Taiwan3.1%
Croatia3.0%
USA2.7%
Cyprus2.7%
  
Advanced Economies1.7%
Euro Area0.8%

By the end of this year Malta is expected to have an inflation rate just below the average of advanced economies, while its current account surplus on the balance of payments should be three and a half times that of that region.  The World Economic Outlook projects Malta’s unemployment rate to remain the lowest in the euro area, standing well below just above a third of that expected for countries in the monetary union.

The IMF’s report also notes that the increase in mortgage servicing costs in Malta was the smallest in Europe, standing at virtually zero as against 1.2% of GDP in Portugal. Maltese households appear to have not been affected by the increase in interest rates which has burdened those in neighbouring countries.

Photo: Petar Avramoski

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