VALLETTA (MALTA) (ITALPRESS/MNA) – The Malta Fiscal Advisory Council has cautioned that Malta’s continued reliance on domestic demand to fuel economic growth may heighten pressure on infrastructure and undermine fiscal sustainability, while delivering limited long-term gains.
The warning was issued as the council assessed the macroeconomic forecasts underpinning Malta’s draft budgetary plan, which all EU member states are required to submit to the European Commission.
Although the MFAC—an independent body whose members are appointed by the finance minister—said that government projections for 2025 and 2026 fall within an endorsable range, it flagged concerns over next year’s outlook. It noted that the balance of risks for 2025 is “tilted to the downside,” even as risks for 2026 appear broadly balanced.
Government forecasts assume a strong rebound in real GDP growth from the 3.1% registered in the first half of 2025, an assumption the council explicitly disputed.
Beyond the projections themselves, the MFAC stressed that Malta’s growth pattern remains overly dependent on private and public consumption. It reiterated that a shift toward export-led growth is “a pressing priority,” urging support for innovation, export diversification, and the upgrading of competitive sectors.
The council also highlighted the need to tackle structural challenges, including skills mismatches, limited innovation capacity, and the demands of digital and environmental transition.
Fiscal policy, it added, should act as a catalyst for productive investment and reforms that foster sustainable, innovation-driven growth.
– photo IPA Agency –
(ITALPRESS).
