Economic trends
Malta has achieved an exceptional economic development during the last 40 years. The country managed to maintain an average GDP growth rate of 5% during 1990s, mainly due to large investments in infrastructure projects. However, the economy experienced a global slowdown at the beginning of the second millennium.
The economic crisis affected the country but to a lesser extent than the rest of Europe. Malta has a solid financial foundation, with little inclination for toxic loans, the country came out of the crisis relatively well. The only sector that was really affected by the crisis was the tourism sector with a reduction in foreign visitors into the country. The only damper is still its excessive budget deficit, which is over the 3% threshold imposed by the European Commission. The European Commission has insisted that this deficit must be reduced by 2011. The country's budget for 2011 anticipates a growth and includes measures aiming to attract FDI.
Main branches of industry
The island's economy is primarily based on tourism (which accounts for almost 30% of the country’s GDP, with over 1 million tourists visiting Malta annually), on manufacturing (electronics and pharmaceutical products) which accounts for 20% of the GDP and 75% of the total exports and on financial activities (which account for 13% of the GDP).
Malta does not have any mineral or energy reserves and it is completely dependent on imports in this field.
The crisis affected the tourism sector due to a decrease in visitors which was clearly noticeable in 2009-2010, notably the European visitors. In 2011, this sector is expected to renew its growth.
International trade
Being centrally located in the Mediterranean, Malta has, for a long time, portrayed itself as a bridge between Europe and North Africa, particularly with Libya with which it has always maintained positive diplomatic and commercial ties. Foreign trade represents more than 150% of Malta's GDP. Its three main export partners are the European Union, the United States and Singapore. It exports mainly electrical and electronic products, machinery, textile products, books and newspapers. Its three main suppliers are Italy, the United Kingdom and France. Malta mainly imports electrical and electronic components, machinery, mineral fuels and oil, vehicles, plastics, and food products.
The country's trade balance has, for a long time, been in the red. However, the situation improved in 2008-2009 due to exports picking up again, propelled by the development of a large export pharmaceutical industry. In 2011, a series of measures favoring the internationalization of Maltese companies will be conducted.
© Export Entreprises SA, all rights reserved.
Last updates: February 2012
