Economic trends
Malta has achieved an exceptional economic development during the last 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 of 2008-2009 affected the country but to a lesser extent than the rest of Europe. Thanks to its 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. Malta finished the yera 2011 with a growth of 2% compared to 3.1% in 2010.
Domestic demand has remained strong and fiscal revenues were larger than expected. This allowed the government to reduce the deficit to 4.2% of the GDP in 2010 and to 3% in 2011. The debt has been contained at around 68% of the GDP and unemployment remained weak in 2011 compared to the eurozone, with a rate of around 6.6%.
One of the major challenges of 2012 will be to improve the rate of absorbtion of structural funds transfered to the Maltese. Between 2007 and 2010, only 40% of the funds attributed to Malta for the 2007-2013 period were put to use. An ambitious three-year plan of 500 million euro, targetting infrastructure (roads, beaches) and environment (waste and water treatment) has been implemented in order to boost the city's attractiveness. However, the majority of projects using structural funds require national cofinancing, which it is difficult to mobilize during periods of budgetary restrictions.
Main branches of industry
The agricultural sector only represent 2% of the Maltese GDP.
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 18% of the GDP and 75% of the total exports and on financial activities (which account for 24.7% of the GDP).
The transport and telecommunications sector represents 23.4% of the GDP.
Malta does not have any mineral or energy reserves and it is completely dependent on imports in this field.
International trade
Being centrally located in the Mediterranean, Malta has, for a long time, portrayed itself as a bridge between Europe and North Africa. Foreign trade represents more than 150% of the GDP. in 2011, its main clients were Germany (12% of exports), Singapore (10.4%), France (10%), the USA (8.9%) and Italy (6%). Malta exports mainly electrical and electronic products, machinery, textile products, books and newspapers.
Its three main suppliers are Italy (25.2%), the United Kingdom (8.6%), France (8%), Germany (7.9%) and Singapore (3.5%). 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.
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Last updates: May 2012
