Shielding success

In the last four years, the economy has grown as much as it had between 1998 and 2012.

In 2023, gross domestic product in Malta reached €19.4 billion, while economic activity was 5.6% higher than that recorded a year earlier. This implies an economic growth rate above the average of the previous five years, 5.4%, and well above double the average growth under the last Nationalist administration.

Malta’s economy is almost 20% larger than it was before the pandemic, and almost twice as large as it was in 2012. In the last four years, the economy has grown by almost two and a half billion euros. This is two and a half times the growth that the Maltese economy experienced in the last Nationalist administration. In fact, in the last four years, the economy grew as much as it had grown in the three Nationalist administrations between 1998 and 2012, or in 14 years.

Growth in gross domestic product, adjusted for price changes

 € billion
Nationalist Administration 1998-20030.9
Nationalist Administration 2003-20080.7
Nationalist Administration 2008-20120.9
Labour Administrations 2019-20232.5

Half of the economic growth compared to last year came from professional and administrative services, the financial sector, and information and communication services. Another 10% was generated by the remote gaming sector. This shows how much the digital sectors of the economy are increasing and how much growth is being generated by sectors with high quality jobs. In contrast to what happened before 2013, 10% of the strong growth Malta has had was generated by manufacturing. While there was a very strong contribution from the hotel and restaurant sectors, the result of the great recovery in tourism, there was also a very positive contribution from the retail sector, as domestic demand remained buoyant unlike in other EU countries where households have been hit hard by austerity policies.   

The driver of economic growth in Malta, in fact, continued to be private consumption. Almost two thirds of economic growth was due to higher consumption by households. This reflected the fact that workers earned the highest ever amount of employment income in history. The latter reached a record figure of almost €8 billion. This was almost €700 million higher than last year.

In addition to the buoyant domestic demand, there was also an improvement in the balance of payments for Malta. This was on the back of an increase in exports of more than €2 billion. This was twice the increase observed in imports. Last year, as a result of the better competitiveness they had because they were protected from the shock of high energy prices, our companies exported a lot more. At the same time, tourism reached record levels, while digital sectors continued to expand at a strong rate.

Investment remained very high, the second highest in the history of the country. In contrast, in the years after the 2009 recession, investment had remained very sluggish. This time backed up by the government’s support, businesses continued their expansion plans. In fact, business profits exceeded €10 billion for the first time.

At this challenging time the Government has served as a shield for the country’s productive capacity and has guaranteed that, when demand increases, businesses will be able to increase their market share. It is this strategic choice of adopting a progressive economic policy which has caused the economic trends in Malta to be so different from that of the countries in the region, many of which have entered recession or are undergoing economic stagnation.

Photo: Lorenzo Castellino

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