Malta: 2025 Article IV Consultation-Press Release; and Staff Report

Malta's economy has grown rapidly over the past decade, with per capita income nearly doubling since 2013. Growth averaged close to 7 percent annually, led by labor-intensive tourism, online gaming, and professional services, and was supported by inflows of foreign workers. Labor-driven growth supported by immigration, is expected to continue in the medium term but slow in the longer term as Malta, an island economy with the highest population density in the EU, cannot sustain further substantial population and labor force growth through immigration. Without adequate policy and structural reform measures, the inevitable deceleration in labor force growth would weigh on potential output and limit actual growth.