VALLETTA (MALTA) (ITALPRESS/MNA) – Malta’s fiscal watchdog has endorsed the government’s latest fiscal forecasts, but warned that the country is unlikely to fully comply with EU fiscal rules under current projections.
In its latest report, the Malta Fiscal Advisory Council (MFAC) said Malta has significantly exceeded its expenditure commitments under the excessive deficit procedure opened by the EU in 2024.
While the council found the government’s fiscal projections for 2025 and 2026 to be within an “endorsable” range, it cautioned that exceptional spending in 2024 has pushed expenditure well beyond agreed limits.
The latest forecasts now project a 5.8% rise in net expenditure, despite Malta benefitting from the most flexible EU spending limits available.
As a result, cumulative deviations from the agreed expenditure path are expected to reach 2.19% of GDP in 2025 and 1.44% in 2026, leading the council to conclude that full compliance with EU fiscal rules is not expected.
The MFAC also warned that while risks to the 2025 deficit appear broadly balanced, 2026 carries a higher risk of a larger-than-projected deficit due to weaker revenue and upward pressure on spending.
The council urged the government to rein in expenditure, pursue sustainable deficit reduction, address long-term structural challenges, and urgently update national legislation in line with the revised EU fiscal framework.
– photo IPA Agency –
(ITALPRESS).
