Outlook for the Maltese Economy 2017-2020 forsees growth

The Central Bank of Malta’s latest economic projections foresee economic growth over the coming three years to remain strong from a historical perspective, though somewhat lower than in 2017.

These projections feature an upward revision in growth when compared to the previous set of forecasts, reflecting a stronger expansion in net exports. Growth in the coming years will be supported by both demand and supply factors. In particular, the continued impact of the energy reforms, new investment projects, increased labour market participation and robust services exports are the primary drivers supporting the economic expansion.

As a result of fast economic growth, the labour market is projected to remain tight, with the unemployment rate expected to reach 4.2% in 2020. Hence, in line with the upward revision in economic activity, the unemployment rate has been revised down throughout the projection horizon.

Annual inflation, based on the Harmonised Index of Consumer Prices (HICP), is projected to trend up to 2% by 2020, reflecting a pick-up in domestic cost pressures.

In terms of public finances, the general government balance is expected to remain in surplus over the coming years. Meanwhile the debt-to-GDP ratio is projected to fall to below 45% by the end of the projection horizon. More details on the bank’s latest projections can be found at https://www.centralbankmalta.org/en/economic-projections