In 2021, the Maltese economy rebounded strongly by 10.4%, thanks to improved business and consumer sentiment and growth in investment and services exports.
Last update : Summer 2022 Economic Forecast (14/07/2022)
|GDP growth (%, yoy)||-8,3||10,4||4,9||3,8|
|Inflation (%, yoy)||0,8||0,7||5,6||3,3|
In 2022, real GDP growth is forecast to reach 4.9%, which is higher than projected in spring, given the expected stronger gains in the services sector, although tampered by the negative impacts of Russia’s invasion of Ukraine. Growth in 2022 is expected to be driven by domestic consumption and net exports. Based on Eurocontrol’s air passenger data projections, the export of tourism services is on course to a very rapid rebound in 2022 with full recovery expected by 2023, contributing to growth in both years. In 2023, real GDP is forecast to increase at a slower pace, but still by a robust 3.8%, affected by a general economic slowdown of its main trading partners, but partially compensated by continued growth of tourism and other services exports.
In June 2022, Malta was removed by the Financial Action Task Force (the international standard setting body on anti-money laundering/countering the financing of terrorism) from the list of jurisdictions under increased monitoring. This positive outcome removed the related limited downside risks flagged in previous forecast rounds.
Inflation in 2021 increased only moderately by 0.7% as energy prices were kept unchanged by state interventions and hedging contracts for gas supply. While the authorities have committed to continue limiting energy price growth in 2022, the strong increase in inflation in the first two quarters of 2022 indicates that rising international energy and commodity prices are affecting Malta’s prices indirectly. Inflation in 2022 is set to rise to 5.6%. The increases in food, transport and imported goods prices, and a continued recovery in the tourism and hospitality services are set to drive up price pressures also in 2023, with inflation remaining elevated at 3.3%.