The International Monetary Fund Executive Board concluded the 2025 Article IV consultation with Malta, judging that robust growth has continued despite global uncertainty but that the country’s labour-intensive growth model is approaching its limits. Real GDP growth is estimated to have slowed to 3.9 percent in 2025 while inflation declined to slightly above 2 percent and public debt remained on a sustainable path, with growth expected to ease toward its potential rate of about 4 percent as immigration-driven expansion moderates and gaming and tourism reach saturation. Directors supported sustaining fiscal consolidation within the European Union fiscal framework to keep debt broadly stable and rebuild buffers while creating space for investment in infrastructure, human capital and innovation. They pointed to scope to enhance revenue mobilisation through continued digitalisation of tax systems and improvements in value-added tax administration and corporate taxation, and recommended gradually phasing out untargeted electricity and fuel subsidies while protecting vulnerable groups. The banking sector was assessed as sound and well-capitalised with high capital and liquidity buffers and low non-performing loans, but the Board urged vigilance on rising real estate exposures and the growing role of non-bank financial institutions, digital finance and crypto-asset providers, alongside planned expansion of macroprudential measures, stronger supervision, data availability and stress testing, and continued progress on anti-money laundering and combating the financing of terrorism. Structural priorities highlighted included addressing labour shortages and skills mismatches, stepped-up investment in infrastructure and technology, improving judicial efficiency, and advancing digitalisation, innovation, energy security and climate resilience to support a transition to higher value-added, productivity-led growth.
International Monetary Fund 2026-02-06
International Monetary Fund concludes Malta Article IV and calls for sustained fiscal consolidation and a shift to productivity-driven growth
The IMF Executive Board's 2025 Article IV consultation with Malta noted robust growth despite global uncertainty, with GDP growth slowing to 3.9% and inflation slightly above 2%. The Board emphasized fiscal consolidation, enhanced revenue mobilization, and vigilance in the banking sector, while highlighting structural priorities such as addressing labor shortages, investing in infrastructure and technology, and advancing digitalization and climate resilience.