The Maltese economy

The secret to the flourishing Maltese economy lies in its diversity. The economy has successfully maintained steady growth throughout the years with investments in its numerous sectors adding up to the highest government surpluses in the EU.
 
Until its acceptance into the EU in 2004, Malta was listed as a developing country by the IMF. Its EU membership has not only boosted its allure as a hub for foreign investment but also strengthened its economy with the adoption of the Euro currency. Malta enjoys a healthy unemployment rate currently at 3.5%—it’s considered the second lowest in Europe. This coupled with a thriving tourism sector fosters domestic consumption of goods and services in addition to the exports.
 
Gross Domestic Product Growth
The GDP of Malta is currently recognized as having a growth rate of more than double the EU average. It is no surprise that Malta has one of the highest GDP growths in the EU with the growth rate for the third quarter of 2018 standing at 7.1%. Analysis reveals a growth rate of 7.2% in the first quarter of the year 2019. Growth is expected to be driven by rising domestic demand. International credit ratings for Malta are in good standing because of the positive outlook for its potential economic growth in the near future.
 
Foreign Direct Investment in Malta
Foreign Direct Investment plays a very important role in the Maltese economy given its esteemed status as an investment destination. Contributions are prominently towards the financial and insurance services sector. Malta’s banking sector is largely applauded for its reliable banking services and ease of access to credit facilities.
 
Maltese regulators apply an array of measures to keep the island attractive for foreign investors. The quaint investment environment is regulated through a legislature that ensures security for investments made while simultaneously attracting more FDI to the island through incentives. The government extends incentives in the form of soft loans, loan guarantees interest rate subsidies and investment tax credits making it a competitive destination amongst other EU territories. All these events have fuelled growth and advancements in sectors such as financial services, real estate, ICT and maritime and logistics. Trends show a rising interest in investments towards health and telecoms sectors.
 
Growth Sectors in the Maltese Economy
Traditionally the manufacturing sector and the tourism sector have strong contributors to economic growth from their robust activities. Recently knowledge and high value-added based sectors have been the more aggressive drivers of growth as compared to traditional sectors. This could be a result of new technologies.  These have seen rampant growth in sectors such as the gaming industry, fintech and pharmaceuticals. 
 
Renewed interest has also been registered for investments in healthcare, education, and energy. Due to the changing times, these sectors have once again become competitive. The vast amount of resources Malta has at its disposal including a skilled labor force and its position as an open market economy have resulted in these sectors becoming more lucrative both domestically and within the region. At a time when growth in most European economies is slowing down, Malta has the edge because of its high GDP growth which is not showing any signs of regression.
 
The property sector in Malta has long benefitted from growth in other sectors giving it a steady growth streak contributing a value of €526,617,000 to the GDP in 2018. The rental yields in real estate are in an upward trend. The demand for property is high with interest from both local and foreign interest characterizing this trend. The construction industry has also been on an incremental trend in order to keep up with the demand for real estate.
 
Professional Assistance
For more insights on the Maltese Economy, you may contact SIGTAX. Our invaluable team, which consists of expert lawyers, accountants and consultants will give you detailed information and counsel during each step.  Our lawyers can also provide you with finer details on the legal aspects pertaining to the Maltese economy so that you don’t skip any necessary steps.