Malta’s Economy Grew More Than Expected Last Year As Central Bank Expresses Optimism About COVID-19 Recovery
Malta’s economy will have grown by 6% during 2021, 0.9% more than originally predicted by the Central Bank with the forecast for next year equally optimistic.
In a note published this morning, the Central Bank said it expected GDP to increase by 6.5% next year, by 5.3% in 2023 and 3.8% in 2024.
This means that compared to earlier projections, GDP growth for 2021 has been revised upwards by 0.9 percentage points. Projections for 2022 and 2023 have been increased by 0.7 and 0.5 percentage points respectively.
“The upward revision in 2021 and 2022 is primarily driven by stronger growth in investment and government consumption, and to a lesser extent, by a stronger projected recovery in private consumption,” the Central Bank said.
It added that tourism exports are expected to have been “more buoyant” in 2021 than originally predicted. “Upward revision in these [sectors] is offset by a strong downward revision to goods exports,” the Central Bank added.
Figures for 2023 have been revised upwards in view of expected higher private consumption resulting from stronger growth in labour income during 2021 and 2022.
On employment, the Central Bank said the labour market was expected to remain strong in 2021 though it did warn of labour shortages resulting from travel restrictions on migration.
While growth in employment is expected to slow down this year, it should pick up next year as the country’s economy recovers.
The central bank said it expected the deficit to decrease slightly to 9.6% of GDP in 2021 with a further reduction going forward reaching 3.1% of GDP by 2023.
Government debt is expected to increase further to 61.2% of GDP in 2023 before starting to decline in 2024.
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