Macroeconomic highlights


Deloitte Malta presents a summary and analysis of the Malta Budget 2018 speech presented to the House of Representatives by the Hon. Prof. Edward Scicluna, Minister of Finance on 09 October 2017.


Strong real economic growth at an accelerated rate, initially hovering at 6.3% during the first half of 2017.

Value added: Sectoral performance

Professional services (33.1%), tourism related activities (23.1%), the gaming industry (15.4%), together with public administration (9.9%) remain the highest contributors to growth.

Income approach: Salary outlays

Public administration, gaming, professional services and tourism related activities contributed to 79% of the aggregate salary income growth during 2017 Q2.

Labour market

Favourable labour market conditions continue. Unemployment rate continues to hover around 4% or close to the natural rate of unemployment.

Public finances

A fiscal surplus of 1.8% of GDP was reported in Q1 2017, as a result of strong revenue growth which outpaced expenditure increases. General Government debt is being consolidated below the 60% benchmark. The latest figures from the consolidated fund reported a fiscal surplus of €31.1 million during the first 8 months of 2017. Debt servicing costs continued to decrease as a result of the current interest rate environment. Central Government debt reported a €9.1 million drop in outstanding debt, compared to August 2016.

Key variables of the macroeconomic outlook

  • Real Growth Domestic Product (GDP) growth is expected to maintain a robust momentum. In 2018, real growth is expected to reach 5.6%.
  • The projected growth rates are more than three times those reported by Malta’s counterparts in the Euro area.
  • Employment growth is expected to hover around 3.2% in 2017 and projected at 2.9% in 2018.
  • Unemployment rates for both the current year and the next (2018) are forecasted at 4.6% and 4.7% respectively.
  • No apparent risks in relation to price stability are expected, though buoyant activity in the labour market is expected to mount price pressures
    to reach an annual inflation rate of 1.5% in 2017 and 1.8% in 2018.
  • Fiscal consolidation is reported to progress in line with Government’s plans, especially to continue reducing the debt to GDP ratio.
  • General government deficit is expected to fall to 0.5% of GDP in 2017, and projected to maintain the same relativity to GDP in 2018.
  • General government debt is expected to decline to 54.9% of GDP in 2017, and projections for 2018 place debt at 50.8% of GDP.
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