Economy – 6.5% real economic growth expected in 2022

Malta is expected to recover more quickly from the negative effects of the Covid-19 pandemic. Government is forecasting a real growth of 6.5% and 8.6% in nominal terms in 2022, while the growth is expected to be 4.7% and 4.5% in 2023 and 2024.

The growth next year is expected to be spurred by domestic demand, with private consumption expected to go up by 4%.

Government investment

is set to grow by 8.8%, while exportation is expected to increase by 6.6%.

All this is pointing to a 2.2% increase in employment, while unemployment will remain relative low at 4%.

Government obtained an allocation of €2.27bn in European funds for the period 2021-2027. Malta will also benefit from €320m from the EU recovery and resilience plan set up to combat the Covid-19 pandemic. Last July, Malta submitted its plan of how the funds will be used.

Government set up the Malta Consultative Council for Financial Services, whose aim is primarily to come up with a strategic plan for the industrial sector.

The strategy is based on three elements – protection from the current predicament, the consolidation of the existing structures and the creation of opportunities for new operators, especially in innovative sectors.

Identity Malta has implemented a single permit electronic platform to ease its operations and is now working on a similar platform for third country nationals to facilitate application processes. From next year, notaries can submit their filings electronically. The agency will also strengthen the eID service it provides.

A seed fund will be set up to encourage researchers and entrepreneurs to come up with sustainable new ideas.

Malta is attracting more start-ups via its Start-Up Residence Permit. Apart from schemes already available from Malta Enterprise, a reference point will be set up to be of better assistance to these entrepreneurs who will be offered a Start-Up Visa.

Malta Enterprise will be working with the Malta Residency Agency to draw up a programme for non-EU persons looking for a package of grants, benefits and opportunities. People who qualify for such assistance will be able to relocate to Malta to contribute to its economy.

Malta Enterprise will also set up a Blue Med Hub to attract start-ups and small enterprises, both local and foreign. The hub will collaborate with entities in Africa and the Middle East.

Government will continue to sustain family business by extending the scheme in relation to the transfer of business down the family line.

Stamp duty will continue to be at 1.5% (instead of 5%) when business is transferred to the sons and daughters and other generations.

Legislation regarding social enterprises is in its final stages. When implemented, the law will enable these enterprises to continue giving their contribution to the country’s economy while providing a means for social inclusion, sustainability and environmental protection.

It was a difficult year for the tourism industry because of the pandemic, during which government sustained the sector with €800m. The collapse that many were anticipating did not materialise and nowadays restaurants and hotels are once again welcoming guests.

The future of this sector depends on how the country continues to tackle the Covid19 situation. New routes are required to assist in the recovery process and discussions are in hand with airlines in this regard. Air Malta has consolidated its routes and increased aircraft on destinations that make more sense while discussions continue with the European Commission on the airline’s future.

The heliport in Gozo will be modernised to improve connectivity between the two islands. This will complement the existing ferry service.

The Agency for the Regeneration of Tourist Zones will be focusing on the implementation of various projects in coastal tourist zones and their management. These include St Paul’s Bay, Bugibba, Qawra and Xemxija.

In spite of the pandemic, the film industry attracted 28 productions which left €91m in the Maltese economy. A master plan for the Malta Film Studios will continue with the building of the first sound stage in the country. The Malta Film Awards will be held for the first time in January.

Infrastructure

A total of €470m will be invested in industrial infrastructural works. This investment by INDIS will see new space for industries to develop not on ODZ land.

Life Sciences Park, Kordin Business Incubation Centre (KBIC), Ħal Far, Bulebel, Marsa, Kordin, San Ġwann and Luqa, among other places, will benefit from this investment.

This investment will also aid those companies that maintain aeroplanes in their infrastructural projects, including the parking zone of Park 4 at the airport in Ħal Farrug.

The Kirkop tunnel and the Airport Intersection Project (KTAIP), as well as the Imriehel bypass, should be completed during 2022.

In Gozo, the aqueduct remains in Rabat will be restored and the Munxar and Ta’ Sannat main square will be regenerated.

With regards to maritime infrastructure, the Grand Harbour will see an infrastructural investment to enable the birthing of vessels, ships and cruise liners.

Government will also be exploring ways to introduce renewable energy on the sea.

• 2.2% increase in employment forecast

• €800m helped tourism industry survive pandemic