Watch: Clyde Caruana Aims To Cut Malta’s Debt-To-GDP Ratio To 40%
Finance Minister Clyde Caruana said he is targeting slashing Malta’s debt burden to give future governments enough leeway to cope with future economic crises.
Caruana said his target is for Malta’s debt-to-GDP ratio to go down from the current 47% to around 40%.
“I won’t be here forever but if another Finance Minister is faced with a new global crisis, they will have enough flexibility to deal with it,” he said. “Although we don’t know what form potential future blows will take, I want future governments to be strong enough to face them.”
Caruana was speaking at the launch of the government’s pre-budget document, where he also revealed that Malta’s deficit for 2026 will go below 3%, down from the current 3.2%.
This is a significant because it will make Malta in lie with the EU’s new fiscal framework that obliges member states to bring their deficit to at least 3%, with the debt-to-GDP ratio not exceeding 60%.
“It’s not going to be just a little bit under 3% either, because I want to send the EU a clear signal that our policies are sustainable,” he said.
Meanwhile, while Malta will maintain its €200 million annual subsidies on electricity and food, Caruana said that the policy’s burden on the nation’s GDP has decreased – from 1.8% in 2022 to an estimated 0.7% in 2026.
Cover photo: Ministry of Finance
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