This year, Malta will reach its highest ever GDP level.
In their revised forecasts, Central Bank experts claim that due to positive developments in recent months, they felt they had to revise their forecasts.
This is because economic growth last year exceeded 7%. This year, it should reach 6%, and exceed 5% in 2023.
The Central Bank’s forecast for this year is even more optimistic than that of the recently issued European Commission forecast. This even though the Commission’s forecast for Malta was the best for all European Union countries.
Moreover, it should be noted that up to six months ago the Central Bank was forecasting that the Maltese economy grew by 5.1%, followed by 5.9% this year and 4.7% in 2023. This means that strong upward revisions have been made due to better results mainly in relation to private investment and consumption, while tourism is recovering at a better rate than forecast.
Economic growth last year exceeded 7%. This year, it should reach 6%,
The Central Bank’s economic forecasts indicate that national wealth will be 5.1% higher this year than before the pandemic started. This confirms the strength of our country’s economic recovery. This follows an impressive improvement in investment over the past year, with an increase of almost 17%. This will lead to more accelerated employment growth this year and a reduction in unemployment to a new historical minimum. In addition, exporting companies are expected to significantly improve their sales abroad. As a result, the balance of international payments is expected to return to surplus already by next year.
A strong element behind the recovery is the anticipation that Maltese and Gozitan families will increase their consumption very strongly. This in light of the fact that in recent months they have saved record amounts, which they will now spend gradually. In addition, the Central Bank report notes that unemployment will continue to fall, and wages are consistently expected to rise at significant rates.
The Central Bank’s forecasts indicate that the fiscal deficit will start to decrease, falling to a third of its current rate by 2024. In addition, the national debt burden is expected to remain close to the rate of 60% of GDP, among the lowest in the euro area, and well below the 2013 level.
The Central Bank experts also point out that the recovery and resilience plan will contribute strongly to our country’s economic growth. So much so that almost a fifth of the projected growth for 2024 will be directly related to the use of these European funds.
This is further confirmation of how our country’s economic recovery is caused by the effective way economic policy is being conducted. In contrast to previous recessions, Government has not chosen austerity and has instead invested heavily. This boosted household incomes and thus maintained positive economic sentiment.