Central Bank of Malta Governor Alexander Demarco called for redirecting incentives toward workforce skills and advanced technology to sustain growth as Malta faces land constraints, congestion and demographic pressures. In remarks at the Annual Conference of the International Network of Financial Services Ombudsman Schemes, held in Malta on Oct. 5-7, 2026, he reviewed the country’s transition from mass emigration to immigration and argued that future growth requires higher productivity. The review linked Malta’s expansion to export services, migration and reforms that increased labor participation, including free childcare, pension deferral incentives and the gradual withdrawal of benefits for people entering employment. Real gross domestic product per capita rose seventeenfold between 1960 and 2025, reaching just under EUR 35,000. Foreign citizens accounted for nearly 30% of residents in 2025, compared with less than 2% in 1995, helping support labor supply as birth rates declined. Demarco emphasized that population aging will require employers to offer more flexible working arrangements and change their approach to training and employing older workers. He also advocated a coordinated approach to migration, investment in education and digital infrastructure, and a financial sector capable of channeling the savings of the baby boom generation into digital and green investment. The proposed shift toward skills and technology would address labor shortages while raising total factor productivity.

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