Malta Expected To See Strongest Economic Growth But Weakest Wage Growth, The EU Commission Revealed
Malta is expected to register the strongest economic growth out of all EU member states this and next year, according to the European Commission’s latest forecast.
Most member states are expected to see real GDP growth projected at 1%, increasing to 1.6% by 2025 but Malta is expected to register 4.6% growth this year and 4.3% in 2025 despite last year’s weakest wage growth in the EU.
The report says Malta had the third-lowest unemployment rate in the EU last year and is expected to see the fastest employment growth at around 4% in both 2024 and 2025.
The report published says numbers for both private consumption and exports were higher than expected due to much higher immigration and tourism flows.
“Besides exceptionally strong immigration, Malta’s economy continues to benefit from a low pass-through of monetary policy to retail interest rates and from government measures that have kept energy prices stable at 2020 level.”
The Government deficit fell to 4.9% in 2023 from 5.5% in 2022 due to the decrease of subsidies, alongside measures to reduce the impact of high energy prices and of the national airline’s costs to restructure.
The deficit forecast is set to decrease further to 4.3% in 2024, due to a contained growth of intermediate consumption expenditure and the public wage bill.
This is expected to be partially compensated by an increase in the net budgetary cost of measures to mitigate the effect of high energy prices to 2.0% of GDP in 2024 from 1.7% in 2023.
Based on unchanged policies, the report says the deficit is set to decline to 3.9% in 2025, reflecting the expected reduction of measures to control the impact of high energy prices to 1% of GDP.
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