VALLETTA, Sept. 18 (Xinhua) -- Malta's economic growth outlook remains strong, with growth projected to stay slightly above 4 percent despite global economic challenges, Finance Minister Clyde Caruana said on Wednesday.
During the presentation of the 2025 pre-budget consultation document, Caruana highlighted Malta's continued economic success, noting that the country consistently outperforms the European Union (EU) in labor force participation and currently boasts the highest economic growth rate among EU member states.
Malta has already surpassed its 80 percent employment rate target, originally set for 2027, achieving this milestone in 2023. Unemployment remains low at 3.1 percent, significantly below the EU average of 5.8 percent.
Caruana expressed optimism regarding inflation, predicting a sharp decrease over the next two years, with inflation stabilizing around 2 percent. He also emphasized the role of increased tax revenues, fueled by higher domestic demand, corporate profits, and employment growth, in strengthening Malta's fiscal position.
The finance minister highlighted the government's efforts to mitigate the impact of global economic pressures. Food and energy subsidies, which accounted for 1.4 percent of the island country's gross domestic product (GDP) in 2022, played a critical role in bolstering economic resilience. Although these subsidies will continue, the amounts are expected to decline as inflation eases.
Caruana reaffirmed the government's commitment to meeting EU fiscal targets while maintaining essential energy support.
"Thanks to Malta's strong economic performance, we are well-positioned to deliver another positive budget that supports the public without hindering growth," Caruana said.
He outlined the government's fiscal strategy, which aims to reduce the budget deficit to below 3 percent of GDP while keeping the debt-to-GDP ratio under 60 percent.
According to data from the National Statistics Office (NSO), annual inflation in August stood at 2.4 percent. The NSO also reported that Malta's economy grew by 4.4 percent in the second quarter of 2024 compared to the same period in 2023.
