Malta is forecast to experience the highest economic growth out of all EU member states, the European Commission said in its 2019 economic forecast.
It estimated that Malta will close off 2019 with GDP growth of 5 per cent, the second highest after Ireland. The autumn 2019 economic forecast also indicates that Malta’s real GDP growth rate for 2020 and 2021 stands at 4.2 per cent and 3.8 per cent respectively.
Despite the encouraging growth rate projections, the Commission noted that the Maltese economy will be growing at a slower pace than what has been experienced in previous years.
It observed that after unprecedented real GDP growth figures of close to 7 per cent in 2017 and 2018, Malta’s economy started to show signs of easing in the first half of the year.
The forecast said that growth of employment rates will continue at a slower pace, while unemployment will remain at historically low levels.
The Commission found that wage pressures have remained contained despite continuous labour and skill shortages, mainly thanks to increases in Malta’s labour supply - both through an influx of foreign workers as well as higher participation rates.
Malta saw its female workforce participation rate increase from 45.3 per cent in 2012 to 61.5 per cent in 2018.
In line with a slowed rate of economic growth, the rate at which jobs are created is also expected to slow down.
The Commission forecasts that the national budgetary surplus is to be maintained. The 2019 surplus is expected to decrease from 1.2 per cent of GDP from 1.9 per cent in 2019.
For 2020, the Commission forecasts the surplus to further decline to 1 per cent of GDP.