The Central Bank of Malta has revised its 2025 GDP growth forecast slightly upwards to four per cent, reflecting a stronger contribution from both domestic demand and net exports. While economic expansion is expected to continue, growth is projected to moderate in subsequent years, reaching 3.3 per cent by 2027.

Key drivers of growth include increased private consumption, supported by tax reductions, and a gradual recovery in private investment. Meanwhile, employment growth remains strong, though it is expected to ease slightly as economic activity stabilizes. The unemployment rate is forecast to settle at three per cent by 2027, indicating a continued tight labour market. Wage growth, which is expected to moderate from six per cent in 2024 to 3.5 per cent in 2027, will help businesses manage labour costs while sustaining purchasing power.

Inflation is also on a downward trajectory, projected to fall to two per cent by 2027. Government finances are expected to improve, with the deficit-to-GDP ratio declining below three per cent after 2025.

For the local business community, these insights provide a clearer picture of Malta’s evolving economic landscape, helping businesses to make informed strategic decisions in areas such as investment, workforce planning, and expansion strategies.