Exports were the main driver of growth

The Maltese economy expanded at a faster pace in the third quarter of 2023 when compared to the previous quarter, according to the Central Bank of Malta. 

Exports were the main contributor to economic growth, while domestic demand had a marginally positive impact. 

The CBM’s estimate of the output gap indicates that the degree of over-utilisation of the economy’s productive capacity increased marginally compared with the previous quarter.

Consumer price pressures eased further, but inflation remained high from a historical perspective and above the European Central Bank’s inflation aim.

The bank’s Business Conditions Index remained above its historical average and the European Commission’s Economic Sentiment Indicator rose further above its long-term average. 

Developments in the labour market remained positive.

The general government deficit-to-GDP ratio and the debt-to-GDP ratio fell when compared with the second quarter of 2023. While Malta’s debt ratio was lower than the euro area average, its deficit ratio was close to the euro area average. 

Whereas Malta’s GDP rose compared to the same quarter a year earlier, that in the euro area contracted marginally. Employment growth in Malta was also faster than the euro average while the unemployment rate was lower. However, HICP inflation was higher as energy inflation stood negative in the euro area, whereas in Malta it remained unchanged. 

In light of persistent inflationary pressures, the ECB raised its key interest rates in July and September. No further increases were announced by the end of the year.