Malta's economy grows 3.9% in first quarter of 2026

Malta's gross domestic product grew by 3.9% in the first quarter of 2026 compared to the same period last year, provisional estimates from the National Statistics Office has shown.

This comes after the National Statistics Office announced on Wednesday that it will not be publishing the government finance and unemployment data scheduled for Friday “in observance of reflection day." In what is ostensibly an unprecedented decision, the NSO will postpone the publication of these two data sets until after the general election.

Malta votes on Saturday 30 May, with Friday being the silent day when political campaigning is banned at law.

According to the NSO, GDP reached €6.2 billion between January and March, an increase of €402.2 million, or 7%, compared with the first quarter of 2025.

The GDP deflator, a measure of price changes across the economy, rose by 3% compared to the same quarter last year, representing an increase of 2.0 percentage points on the rate recorded in the final quarter of 2025.

Growth was largely driven by the services sector, which accounted for 3.5 percentage points of the overall increase in gross value added. Industry contributed a further 0.3 percentage points, while agriculture and fishing dragged slightly, contributing negatively by 0.1 percentage points.

Within services, the strongest performers were financial and insurance activities, which grew by 9%, followed by information and communication at 5.3%, and professional, scientific and technical activities at 4.7%.

From an expenditure perspective, domestic demand contributed 3.6 percentage points to GDP growth, with external demand adding a further 0.3 percentage points. Final consumption expenditure rose by 5.0 per cent in volume terms, household spending was up 3.8%, while general government expenditure climbed by 8.5%. Gross fixed capital formation also increased, rising by 3.6%.

Both exports and imports of goods and services grew, up 4.9% and 5.6%, respectively.

Looking at how GDP was distributed, the €402.2 million rise in nominal GDP was largely accounted for by a €232.5 million increase in compensation of employees, a €98.2 million rise in gross operating surplus and mixed income, and a €71.4 million increase in taxes on production and imports less subsidies.

Gross national income, which accounts for income flows between Malta and the rest of the world, was estimated at €5.6 billion for the first quarter of 2026.

The NSO noted that the data should be considered provisional and are subject to revision.

Government hails figures as proof of economic resilience

The government described the results as evidence that Malta's economy was outperforming its European peers. In a statement, it said that in the first quarter of the year, the economy grew at roughly five times the rate recorded in the rest of the euro area and exceeded forecasts from institutions including the Central Bank and the International Monetary Fund.

Prime Minister Robert Abela echoed the figures on social media. "While growth in the euro area fell to just 0.8% in 2026 Q1, Malta's economy grew by 3.9%, or by about 5 times as much," he wrote on X. "Growth exceeded the projections made by the Commission and other international institutions. Moreover, workers' income rose by twice the GDP growth rate."

The government attributed nearly half of the growth to stronger household consumption, noting that workers' income reached a record €2.8 billion, more than 9% higher than the previous year, with a quarter of that increase linked to the new collective agreement for public sector workers. Domestic demand was also supported by higher investment and increased government expenditure.

On the external side, the government said exports rose by almost €288 million despite a challenging international environment marked by a slowdown in global economic activity and tariffs imposed by the United States.

It argued that Maltese businesses remained competitive partly because they were not burdened by high energy prices, and because the Maltese government had not introduced new taxes of the kind being imposed elsewhere.

The statement also noted that nearly a quarter of economic growth came from the digital sector, with additional contributions from professional and administrative services, financial services, and the hotels and restaurants sector.