Malta to reach EU’s second highest economic growth, deficit still high
VALLETTA (MALTA) (ITALPRESS/MNA) – Malta is expected to register the EU’s second-highest economic growth rate, and lowest rate with inflation slashed by more than half according to the European Commission’s Spring Forecast.
The European Commission’s forecast is expecting an economic growth of 3.9% for Malta this year. Only Ireland is expected to have a higher economic growth at 5.5%.
The European Commission is forecasting a 4.1% growth rate for next year, while inflation is expected remain high at 5.4% in 2023 and decreasing to 2.8% in 2024. Increase in prices for imported goods; especially food, tourism services and housing maintenance services will keep high rate of inflation in 2023.
Economists from the European Commission believe that the measures taken by the Maltese government helped to keep energy prices unchanged in Malta, and are expected to remain in place also in 2023 and 2024. However, this led to a deficit of 5.8% in 2022, described by the European Commission as “among the highest in the EU”. It is expected to gradually decrease in 2023 and 2024. Maltese Finance Minister Clyde Caruana has repeatedly said Malta will need to wane off energy subsidies eventually. The government spent 400 million on energy subsidies last year.
The European Commission remarked that a strong 6.9 per cent GDP growth last year was in large part due to the recovering tourism sector, export of services and increase in domestic demand for goods and services. It added that the public debt is expected to remain below 60% of GDP.
On employment, the EC said that Malta maintains a high employment growth. The employment increased by an impressive 6% in 2022, both public and private. It said that Maltàs unemployment rate fell to 2.9% in 2022 and is expected to remain around this level by 2024. The report noted that “workers and skills shortages are expected to remain the main limiting factors for the Maltese economy over the forecast horizon,” the report said.
– photo Department of Information Malta –