Malta Set To Lead EU Economic Growth Until 2027

Malta is on course to record the strongest economic growth in the European Union (EU) over the next two years, according to the European Commission’s (EC) spring economic forecast. Malta's economy is projected to expand by 3.7 percent in 2026 and 3.6 percent in 2027. This is markedly in front of the bloc’s average of 1.1 per cent this year and 1.4 per cent next.

The projection follows a robust 2025, in which the Maltese economy grew by around 4 per cent. The Commission attributed the country's continued outperformance largely to its services sector, with tourism singled out as having exceeded expectations last year and forecast to remain resilient through 2026 and 2027. 

Labour market indicators are also among the strongest in Europe. Employment in Malta is expected to have risen by 3.9 per cent in 2025, with unemployment projected to remain at around 3 per cent over the forecast horizon. Wage growth is rising in tandem, supporting household consumption and reinforcing domestic demand as a secondary engine alongside the export-facing services base.

Inflation is forecast to edge up to 2.7 per cent in 2026, driven primarily by higher international energy prices, before moderating thereafter. The Commission noted that domestic energy price stabilisation measures are expected to continue cushioning consumers and businesses from external price pressures, supporting both real incomes and competitiveness in energy-intensive sectors.

The report also presents a constructive picture of Malta's public finances. The fiscal deficit, which stood at 2.2 per cent of GDP in 2025, is forecast to remain stable at 2.2 per cent in 2026 before easing to 2.1 per cent in 2027, with debt-to-GDP stabilising at around 46 per cent. Both metrics sit comfortably inside EU thresholds, and Malta is now positioned to exit the EU's Excessive Deficit Procedure (EDP) two years ahead of schedule. 

Taken together, the figures signal that Malta is consolidating its position as one of Europe’s leading international financial centres. Strong growth, low unemployment, and a stable fiscal position give investors a clear reason to look at Malta as a European entry point.