The Central Bank of Malta projects real gross domestic product growth of 3.7% in 2026, 3.6% in 2027 and 3.8% in 2028, with private consumption remaining the main driver. Compared with its previous forecast, the Bank lowered its 2027 growth projection by 0.1 percentage point and raised its 2028 estimate by the same amount. The Middle East conflict is expected to have a limited impact in 2026, followed by a marginal delayed effect on growth and prices in 2027. Harmonized Index of Consumer Prices inflation is forecast at 2.5% in both 2026 and 2027 before easing to 2.2% in 2028, representing upward revisions of 0.2 percentage points in 2026 and 2028 and 0.4 percentage points in 2027. Fiscal support is expected to limit the direct effect of higher energy prices, although imported goods and food inflation will rise. The government deficit is projected to narrow from 1.9% of GDP in 2026 to 1.6% in 2028, while debt is forecast to fall from 46.0% to 44.1% of GDP over the same period. Growth risks are tilted downward because a longer or more intense conflict could weaken foreign demand and disrupt tourism, aviation and shipping. Inflation and fiscal risks point upward, reflecting the potential for greater energy and supply disruptions, indirect wage and margin effects, and higher spending on energy support measures.
Central Bank of Malta2026-06-17
Central Bank of Malta forecasts resilient growth, raises inflation projections amid Middle East conflict
The Central Bank of Malta forecasts GDP growth of 3.7% in 2026, 3.6% in 2027 and 3.8% in 2028. It raised its inflation projections to 2.5% for 2026 and 2027, citing imported price pressures from the Middle East conflict. Growth risks are tilted downward, while inflation and fiscal risks are tilted upward.