Malta to exit Excessive Deficit Procedure two years early

Data published by the National Statistics Office shows that Malta's deficit in 2024 was 3.7%, improving by 0.8 percentage points over the budgeted 4.5%.

Malta is now set to exit the Excessive Deficit Procedure two years ahead of schedule, data published by the National Statistics Office shows.

“Thanks to responsible fiscal management, prudent decision-making, and a strong commitment to good governance, the Maltese Government has placed the country on a path of financial sustainability and ensured a stronger-than-expected recovery,” a Finance Ministry statement read.

The latest data shows that the national deficit for 2024 was 3.7%, improving by 0.8 percentage points over the budgeted 4.5%. Similarly, the debt-to-GDP ratio fell to 47.4%, significantly lower than the projected 55.3%, marking a sharp 7.9 percentage point improvement.

In light of the positive trends registered during the first months of this year, the deficit forecast for 2025 is now being revised from 3.5% to 3.3%.

During a press conference on Tuesday, Minister for Finance Clyde Caruana stated “today’s announcement from the NSO reaffirms the effectiveness of this Government’s economic strategy. We remained focused on reducing the deficit without compromising the country’s growth momentum or social well-being.”

Finance Minister Clyde Caruana speaking following the publication of NSO figures

“Thanks to targeted measures and sound governance, we have not only met our fiscal targets but surpassed them, allowing us to implement impactful budget measures that benefit the Maltese citizens,” Caruana said.

The ministry said it remains committed to fiscal sustainability and to investing in the well-being of citizens.

In July 2024, Europe’s heads of state adopted the European Commission’s excessive deficit procedures for Malta and six other member states, calling on the respective governments to return spending levels under EU limits.

Malta had a deficit of 4.9% in 2023 and government debt at 50.4% of GDP. Member states will have to bring back their deficit to at least 3% of their gross domestic product and national debt not exceeding 60% of GDP.

The Commission said Malta’s excess deficit in 2023 was not exceptional, resulting neither from an unusual event nor from a severe economic downturn.