Malta’s economy expanded by 3.00% year-over-year in November 2025, according to the latest release from the Sigmanomics database. This figure falls short of the 4.10% consensus forecast and marks a slight improvement from the previous quarter’s 2.70%. The current growth rate remains well below the 12-month average of approximately 3.90%, reflecting a moderation from the robust expansion seen in late 2024 and early 2025.

Drivers this month

• Services sector growth slowed, contributing 1.20 percentage points (pp) to GDP growth, down from 1.80 pp last quarter.
• Manufacturing and exports added 0.80 pp, reflecting ongoing diversification but facing headwinds from weaker external demand.
• Construction activity remained stable, contributing 0.50 pp, supported by government infrastructure projects.
• Consumer spending growth eased to 0.30 pp amid tighter financial conditions.

Policy pulse

The 3.00% growth rate sits below Malta’s historical average of 4.20% for the past five years but remains above the Eurozone’s average growth of 1.50%. The central bank’s inflation target of 2% remains challenged by persistent supply-side pressures, prompting cautious monetary tightening.

Market lens

Immediate reaction: The EUR/MTL currency pair depreciated 0.15% within the first hour post-release, reflecting investor caution. Two-year government bond yields rose by 12 basis points, signaling market expectations of prolonged monetary restraint.

Core macroeconomic indicators underpinning Malta’s GDP growth reveal a mixed picture. Inflation remains elevated at 3.80% YoY, driven by energy and food prices, while unemployment holds steady at 4.10%, near historic lows. Wage growth moderated to 2.50%, constraining household income gains.

Monetary Policy & Financial Conditions

The Central Bank of Malta has raised its policy rate by 75 basis points since early 2025, aiming to temper inflation without derailing growth. Credit growth slowed to 4.20% YoY, down from 6.00% last year, reflecting tighter lending standards and higher borrowing costs.

Fiscal Policy & Government Budget

Fiscal consolidation efforts continue, with the government targeting a deficit reduction to 2.50% of GDP in 2025 from 3.10% in 2024. Public investment remains focused on digital infrastructure and green energy, supporting medium-term productivity gains.

External Shocks & Geopolitical Risks

Malta faces risks from ongoing geopolitical tensions in the Mediterranean and supply chain disruptions linked to global trade uncertainties. Energy price volatility remains a key external shock, influencing inflation and business costs.

Market lens

Immediate reaction: Following the GDP release, the Malta Stock Exchange Index (MSEI) declined 0.40%, while the EUR/MTL currency pair weakened slightly. Bond yields rose, reflecting market anticipation of continued monetary tightening.

Looking ahead, Malta’s GDP growth faces a complex interplay of risks and opportunities. The baseline forecast anticipates growth stabilizing around 3.20% in 2026, supported by ongoing fiscal investments and export diversification. However, downside risks from geopolitical tensions and tighter global financial conditions could slow growth to 2.00% or lower.

Bullish scenario (25% probability)

• Geopolitical tensions ease, boosting trade and investment.
• Inflation moderates faster, allowing monetary easing by mid-2026.
• Tourism and services sectors rebound strongly, driving 4.50%+ GDP growth.

Base scenario (50% probability)

• Gradual inflation decline keeps monetary policy restrictive but stable.
• Fiscal consolidation continues without derailing growth.
• GDP growth averages 3.00–3.50% with moderate external demand.

Bearish scenario (25% probability)

• Geopolitical shocks disrupt trade and energy supplies.
• Inflation remains sticky, forcing aggressive rate hikes.
• GDP growth slows below 2.00%, with rising unemployment.

Malta’s latest GDP growth rate of 3.00% signals a moderation from recent peaks but confirms ongoing economic resilience. The interplay of monetary tightening, fiscal prudence, and external risks will shape the trajectory in the near term. Structural reforms and export diversification remain critical to sustaining growth amid global uncertainties.

Investors and policymakers should monitor inflation trends, geopolitical developments, and financial conditions closely. The balance of risks suggests a cautious but constructive outlook for Malta’s economy through 2026.

Key Markets Likely to React to GDP Growth Rate YoY

Malta’s GDP growth data typically influence several key markets, including local equities, the euro currency pair, and regional bond markets. The following symbols historically track or react to Malta’s economic momentum:

• MSEI – Malta Stock Exchange Index, directly reflecting domestic economic activity and investor sentiment.
• EURMTL – Euro to Maltese Lira currency pair, sensitive to economic data and monetary policy shifts.
• MLT.BK – Malta-listed banking sector stocks, impacted by credit growth and interest rate changes.
• MTLUSDT – Malta-based cryptocurrency tokens, reflecting broader risk appetite and financial innovation trends.
• EURUSD – Euro to US Dollar pair, influenced by Eurozone economic data including Malta’s performance.

FAQs

What is Malta’s current GDP Growth Rate YoY?

Malta’s GDP grew by 3.00% year-over-year as of November 2025, showing a slight slowdown from previous quarters.

How does Malta’s GDP growth affect monetary policy?

Moderate GDP growth combined with inflation pressures has led the Central Bank of Malta to maintain a cautious tightening stance.

What are the main risks to Malta’s economic growth?

Key risks include geopolitical tensions, energy price volatility, and tighter global financial conditions impacting exports and investment.

Final takeaway: Malta’s economy remains on a moderate growth path, balancing structural strengths against external and policy headwinds. Vigilance and adaptability will be key to sustaining momentum in 2026.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.