Malta’s economic growth for 2024 revised upwards by European Commission

Malta’s economic growth in 2024 has been revised upwards to 4.6% by the European Commission in its winter forecast released today.

The upward revision when compared to the autumn forecast last November, is set to be driven by continued strong growth in net exports and private consumption.

GDP growth in Malta remains well above the Euro area average of 0.8% for 2024.

In a reaction to the Commission's findings, Prime Minister Robert Abela said on X that Malta bucked the trend. "Progressive decisions make a real difference in people’s lives," he added.

While the Commission revised down the prospects for the EU, its experts once again concluded that Malta’s expansion will be higher than previously expected. They also lowered the expected path of inflation. Progressive decisions make a real difference in people’s lives. - RA

— Robert Abela (@RobertAbela_MT) February 15, 2024

The Commission is expecting investment growth to pick-up this year after the construction slowdown in 2023. Public consumption is also set to remain strong.

The winter forecast predicts growth in 2025 at 4.3%, which is broadly unchanged from the autumn forecast. In 2025, the growth rate of consumption, investment and net exports is expected to stabilise at slightly lower levels in comparison to 2024.

The Commission estimates GDP growth in 2023 to close at 6.1%, which is higher than projected in the autumn. This upward revision is due to upward revisions of economic activity in the first two quarters of last year and high growth of 2.4% in the third. Private consumption and net exports grew strongly last year but gross fixed capital formation declined, amid weaker construction activity.

Inflation as measured by the HICP index hit 5.6% in 2023 despite energy prices being kept at 2020 levels by government intervention.

The winter forecast predicts that inflation in 2024 and 2025 will moderate to 2.9% and 2.7% respectively. Pressures in food and services prices will continue to be felt while retail energy prices are set to remain stable due to government intervention. These forecasts are lower than in the autumn 2023 forecast but remain above the Euro area average despite the heavy subsidies government is dishing out to maintain price stability in the energy and fuel sectors.