Malta’s public finances have taken a major step forward. In 2025, the general government deficit fell to 2.2% of GDP, down from 3.4% in 2024 and comfortably below the European Union’s 3% reference value. At the same time, government revenue increased by more than €736 million, while the deficit narrowed by almost €249 million.

For families, workers and businesses, the message is straightforward: Malta’s economy is growing, employment is strong and that economic activity is translating into stronger public revenues.

What makes this improvement particularly significant is where much of the additional revenue is coming from. Corporate income tax reached exceptionally high levels in 2025, reflecting strong economic activity, higher company profits, improved tax compliance and changes in the tax framework. Personal income-tax receipts also reached record levels despite measures that widened tax bands and provided tax rebates.

In other words, this is not simply a story of government putting up tax rates. It is a story of more people working, higher wages, stronger business activity and better collection of taxes that are already due.

A growing economy also gives government more room to invest in healthcare, education, infrastructure, pensions and public services without relying on across-the-board tax increases.

The strength of domestic economic activity is reflected in VAT revenues, while Malta’s tourism sector continued to deliver record results. These are not abstract numbers: they reflect visitors coming to Malta, spending in hotels, restaurants and local businesses, and supporting thousands of jobs across the economy.

Malta’s debt position also remains favourable by European standards. General government debt stood at 46.4% of GDP in 2025, compared with 81.7% across the EU27. The improvement in the deficit has also allowed Malta to move out of the EU’s excessive-deficit process, with the European Commission recommending the closure of the procedure in 2026.

Of course, there is no room for complacency. Corporate tax revenues can fluctuate, and responsible government means recognising that exceptionally strong revenues cannot simply be assumed every year. The answer is to keep strengthening the foundations of the economy: attracting investment, developing high-value sectors, investing in skills and infrastructure, and improving productivity.

But the broader direction is clear. Malta is creating jobs. Wages are rising. Businesses are generating more activity. Tourism is performing strongly. Revenue is growing. And the deficit is coming down.

That is what economic growth should ultimately deliver: a stronger economy capable of supporting better public services, greater opportunities and greater security for families and future generations.

The Labour Government deserves credit for maintaining an economic strategy that has supported strong growth while bringing Malta’s public finances back below the EU’s 3% deficit threshold.

The challenge now is to build on that success responsibly and sustainably, with the interests of Maltese families, workers and businesses at the centre. Growth is paying dividends. Now the priority is to build on that progress and make sure those dividends continue to strengthen Malta’s future.