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3% ECONOMIC GROWTH FOR MALTA IN Q1

In real terms, Malta's GDP expanded by 3% in the first quarter of 2025.
→ According to preliminary estimates issued by the National Statistics Office on Thursday, this was mostly driven by strong domestic demand and favourable foreign ...trade.

As a result, the Gross Domestic Product (GDP) increased to €5.5 billion.
→ In nominal terms, this is a 5.4%, or €283.5 million gain, over the same period previous year.

Foreign trade supplied an additional 0.5 percentage points to the total rise, while domestic demand contributed 2.5 percentage points.
→ In the meantime, the GDP deflator, which measures how price changes affect the economy, increased by 2.4% from 2024's first quarter.
→ This indicated a little easing of inflationary pressures, as it is a slight decline from the 2.9% observed in the last quarter of 2024.

The data shows that Malta's economy is still resilient, continuing to develop steadily through 2025.

Read the Article!
https://timesofmalta.com/article/malta-economy-grows-3-first-quarter-year.1110530

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EU SEES ECONOMIC BOOST FOR MALTA

The European Commission’s spring forecast on Monday projected continued growth for Malta’s economy in 2025, driven by strong domestic demand and net exports.
→ GDP is expected to grow by 4.1% in 2025 and 4% in 2026, following a 6% rise in... 2024, in line with government forecasts.
→ Inflation is expected to ease, and the labour market to stabilise.
→ The government deficit is forecast to fall below 3% by 2026, with public debt stabilising under 48% of GDP.

Real GDP rose by 6% in 2024, boosted by strong private/public spending and exports, especially in tourism and financial services.
→ Household incomes and private consumption grew by 5.7%, while government spending rose by 7.3%, significantly aiding growth.

GDP growth is expected to moderate but remain strong, at 4.1% in 2025 and 4% in 2026.
→ Private consumption will remain the main growth driver, increasing by 4.1% in 2025 and 3.9% in 2026.

Net exports and investment are also expected to support growth.
→ Investment is set to rise by 2.5% in 2025 and 2.1% in 2026, below long-term averages.

Employment rose by 5.1% in 2024, driven by immigration to meet labour demand.
→ Job growth is expected to slow to 3.1% in 2025 and 2.8% in 2026.
→ Unemployment is projected to remain low at 3.1% in both years.
→ Wage growth is expected to exceed inflation, rising by 4.1% in 2025 and 3.5% in 2026.

The deficit is expected to fall to 3.2% of GDP in 2025, mainly due to reduced capital spending as airline costs end.

Energy subsidies are expected to stay flat in nominal terms but shrink as a share of GDP.
→ Social spending will slightly decline as a share of GDP, balanced by lower income tax due to bracket reforms.
→ With no policy changes, the deficit could fall to 2.8% in 2026, as revenues outpace GDP growth.
→ Public debt is projected to remain under 48% of GDP throughout the forecast period.

Read the Article!
https://timesofmalta.com/article/eu-delivers-upbeat-economic-forecast-malta.1109946

INFLATION SEES MILD RISE IN APRIL

In April, the annual rate of inflation rose to 2.6% from 2.1% in March.

According to the NSO, transport and education had the highest annual inflation rates in April (5.7% and 5.6%, respectively).
→ Conversely, the lowest rates ...were found in furniture, domestic equipment, and normal household maintenance (-0.2%) and communication (-3.7%).

The transport services recorded the biggest increase in the overall annual inflation rate in April 2025.
→ Due mostly to rising prices for non-alcoholic beverages and restaurant services, respectively, the food and non-alcoholic beverages index (+0.68 percentage points) and the restaurant and hotel index (+0.53 percentage points) had the second and third highest contributions, respectively.

The communication Index (-0.14 percentage points) and furnishings, domestic equipment, and routine household maintenance (-0.01 percentage points) had negative contributions, owing primarily to decreasing costs for mobile phone equipment and household appliances.

Read the Article!
https://timesofmalta.com/article/inflation-creeps-april.1109941

UNIONS LOSING GROUND IN PRIVATE SECTOR

A University of Malta academic reports that trade unions are struggling to stay relevant in Malta's private sector.
→ Godfrey Baldacchino, chairperson of the Centre for Labour Studies, wrote the research paper, The condition of ...industrial relations in Malta - a critical remark.

Malta’s workforce doubled from 130,000 in 1991 to 260,000 in 2020.
→ Yet, economically active trade union members only increased by 23,800 (34%) in that period.
→ Most of these are in the public sector-state hospitals, schools, and agencies-which enjoys near-total bargaining coverage.
→ By contrast, just 13% of private sector workers were covered by collective agreements in 2022, down from 33% in 1995.
→ That year, Malta had 130 collective agreements, according to the Department of Industrial and Employment Relations.

In 2022, only 31% of all workers were covered by a labour agreement, among the lowest in Europe.
→ Baldacchino attributes this to a rise in economic migrants and a growing culture of individualism.
→ He notes that many migrant workers, despite their varied backgrounds, are generally reluctant to join unions.
→ Many Asian workers come from more hierarchical cultures. Baldacchino writes they may prefer to negotiate individually, defer to authority, or avoid upsetting their bosses by joining a union.

The report also notes that as neoliberal attitudes spread, more workers believe they must secure their conditions by dealing directly with their employers.
→ Previously, the partisan rivalry between Malta’s two main unions-General Workers Union and Unjoni Ħaddiema Magħqudin-boosted union growth, but political parties no longer urge workers to join.

Baldacchino suggests four strategies to halt and reverse union and collective bargaining decline:
→ First, promote industry-wide (multi-employer) collective bargaining.
→ Second, consider making union membership mandatory, with opt-out options.
→ Third, allow multiple unions—or those with under 50% worker support—to negotiate.
→ Fourth, convert wage regulation orders into sectoral collective agreements.

Read the Article!
https://timesofmalta.com/article/unions-struggling-relevance-private-sector.1108806

BOV SEES 5.3% PROFIT GROWTH COMPARED TO Q1 2024

Bank of Valletta reported a pre-tax profit of €67.1 million for Q1 2025, a 5.3% increase compared to the same period in 2024.
→ The bank expects to achieve a full-year pre-tax profit of €200–250 million, supported by ...strong performance in both revenue growth and cost control.

BOV highlighted a strategic shift from liquid cash assets to investments, growth in fee and commission income, stronger core business revenue, and a rebalanced balance sheet.
→ Upcoming actions include a bonus issue, share buyback, and bond issuance, aimed at enhancing capital structure and boosting shareholder value.
→ Operational income reached €118 million, slightly higher than the previous year.

Total costs increased to €52.8 million, a 7.5% rise driven primarily by employee and legal expenses, as well as ongoing investments in technology to support digitalisation efforts.
→ The non-performing loans ratio decreased to 2.5%, reflecting an improvement in credit quality.
→ Total assets reached €15.6 billion, up €549 million from the end of 2024.
→ The Treasury Portfolio grew by 9.5% to €6.9 billion, while deposits saw a modest increase of €2.9 million.

Chairman Gordon Cordina stated that BOV is well-positioned to meet its 2025 goals, maintaining strong capital and liquidity buffers while focusing on providing stable returns for shareholders.

CEO Kenneth Farrugia reported growth across all key business segments, including personal, home, and business loans, an increase in fee income from cards, and significant expansion in the investments division.
→ He reaffirmed the bank’s commitment to sustaining these results while transforming its business and operations to enhance the experience for both personal and business customers, as well as employees.

BOV is also prioritising green finance, offering incentives for renewable energy investments and environmentally-friendly projects to encourage sustainable practices among clients.

Read the Article!
https://timesofmalta.com/article/bov-profits-53-quarter-2024.1108913

MALTA: 1 IN 6 AT POVERTY RISK IN 2024

In 2024, 92.690 persons lived in homes with a national equivalised income below the at-risk-of-poverty threshold (€12,258), according to the National Statistics Office's annual European Statistics on Income and Living Conditions.
...→ This corresponds to a 16.8% ARP rate, an increase of 0.2% from the previous year.
→ The NSO stated that the ability of households to buy a list of 13 items is the basis for European statistics on material deprivation

While non-income data relate to 2024, income statistics are based on 2023.
→ The average gross household income for 2023 was predicted to be €47,893.
→ Disposable income, after social contributions, taxes, and alimony, was €38,236 on average.

The number of individuals with equivalised disposable income below the ARPT (€12,258), which is 60% of the median after social transfers, is called the ARP.
→ According to EU-SILC 2024, the predicted ARPT increased by 7.9%.
→ The ARP rate was 16.8%, with 92,690 people at risk.

The ARP rate was 15.6% for men and 18.3% for women, with men decreasing by 0.1 points and women increasing by 0.7 points.
→ For under 18s, the rate rose by 2.1 points to 24.1%.
→ For those 65 and older, it increased by 0.7 points to 29.7%.

Regarding specific items, 28.8% said their household couldn’t afford a one-week holiday.
→ 18.3% said they couldn’t cover an unanticipated €900 cost.
→ Only 1.8% said they couldn’t afford a car.
→ 11.1% could not regularly enjoy social activities or spend small amounts on themselves weekly.
→ 5.4% said they couldn’t buy new clothes, and 5.3% couldn’t afford two well-fitting shoes.

According to the Social Policy Ministry, in 2024, only 4% of Malta’s population experienced severe material and social hardship, down from 4.1% in 2023.
→ During the pandemic in 2021, 5.4% faced extreme poverty, which doubled to 10.2% in 2013.
→ The government has increased pensions, child allowances, COLA, and other benefits since the data was collected; these are not reflected in the latest figures.

The government also stated that life satisfaction rose from 7.4 in 2023 to 7.5 in 2024 on a scale of 0 to 10, the highest since data collection began in 2013.

Read the Article!
https://timesofmalta.com/article/one-six-people-malta-risk-poverty-2024-new-data-shows.1108846

70% OF SMALL FIRMS DOUBT MALTA'S DIRECTION

According to a recent survey, almost a third of Maltese small businesses believe that next year would not be a good time to invest, with more than half remaining doubtful.
→ 427 small business were questioned, and only 16% ...said the next 12 months would be a good time to invest, 30% said it wouldn't be, and 54% weren't sure.
→ In order to better stimulate business investment, the study suggested an immediate review and redesign of investment-related schemes, such as the Micro Invest plan, which hasn't altered in ten years.

The Chamber of SMEs issued it in partnership with MISCO, and the findings were released in the quarterly SME Barometer.
→ The survey topic examined the opportunities and difficulties faced by small business owners.

70% of respondents said they believe Malta is 'heading in the wrong direction'.
→ Once again, 43% of businesses cited staff shortages as their biggest concern, making that the most urgent issue.
→ Unfair competition (24%), excessive competition (19%), late payments (17%), and rising inflation (16%) came next on the results.
→ Concerns about inflation have increased compared to the prior three quarters.

The survey urged the government to address unfair competition, which significantly affects businesses and daily operations.
→ The report suggests improving transparency and anti-corruption measures to rebuild faith in public institutions, as well as overhauling public procurement and tendering processes for greater transparency, competitiveness, and accessibility.

When asked about the usage of artificial intelligence (AI), 50.8% of firms reported that they or their employees were using it, while 49.2% did not.
→ Despite this, 71% claimed they had no plans to use AI in the coming year, and only 34% reported having any training on the subject.
→ The Chamber suggested conducting a public awareness effort to educate businesses about the benefits and risks of AI adoption.

Read the Article!
https://timesofmalta.com/article/most-small-businesses-malta-uncertain-investment-prospects-survey.1108855