The government deficit in Malta remains above the 3.0% level, but appears to be on a downward trajectory, having declined from 4.5% last year to 4.0% in 2024. In fact, according to the budget’s estimates, the deficit as a percentage of GDP is set to fall by another 0.5 percentage points year-on-year, with the government aiming to ultimately meet the 3.0% criteria in 2026, with a further reduction to 2.6% anticipated in 2027. This trajectory, while lagging behind the EA average, remains ahead of some of Europe’s largest economies, including France and Italy.
Malta’s debt-to-GDP ratio is forecast to peak at 50.1% in 2025, reflecting a substantial increase in government debt, which is projected to rise from €9.8bn in 2023 to €11.1bn in 2024 and further increase to €12.0bn in 2025. By 2027, total government debt is expected to reach €13.5bn. This increase in debt highlights the government’s ongoing financial commitments, including investments in infrastructure, public services, and social programs, which are crucial for driving economic growth and development.
