Country Economic Forecasts > Malta

GDP grew a spectacular 6.3% in 2015, the fastest since 1995 and setting Malta as one of the fastest-growing economies in the Eurozone. This result was mainly driven by an investment surge, a one-off related to the construction of a power plant. As capital spending slows to more sustainable levels, we see economic growth moderating gradually, although at an expected 3.5% this year and 2.7% in 2017 it will remain well above the Eurozone average. Further ahead, we expect economic growth of 2.5% a year in 2018-19. Unemployment of about 5% is about half the Eurozone average and tourism a key industry also has solid momentum, helped by the ongoing recovery in the EU, which underpins our positive forecast. Strong service exports and the lower oil import bill is supporting the current account surplus, although we expect the surplus will ease going forward amid a strong rise in capital goods imports due to energy sector projects. The long-term economic outlook remains solid, supported by a relatively strong fiscal position. But the working age population is falling and reforms are still needed to ensure the long-term sustainability of public finances.