PwC Malta has released its second Economic Outlook for 2024, providing insights into global economic trends and projections for the coming fiscal years.
This edition highlights moderate global growth projections at 2.7% and 2.6% for 2024 and 2025 respectively, masking slowdowns in traditionally stronger growth economies such as China and the US, compared with continued robust growth in India and a marginal pick-up in the relatively slower growing Euro area.
Meanwhile, in Malta, official GDP data for Q1 suggest a marginal slowdown in Malta’s Quarterly GDP growth, down from 8.7% in Q1 2022 and 6.4% in Q1 2023, to 4.6% in Q1 2024.
The slowdown in output witnessed in Q1 2024 appears relatively broad-based across sectors, with manufacturing, ICT, professional services and retail all slowing down in this quarter, while real estate and construction registered up-ticks in performance.
From an expenditure perspective, consumption of food and beverages has registered a decline compared to the same quarter in the previous year, similar to expenditure on housing and furnishings. This contrasts with strong growth in spending in restaurants, hotels and recreation.
Furthemore, in line with official GDP data, economic sentiment survey data also point to a less upbeat outlook amongst local businesses in Malta during 2024.
Meanwhile, on the fiscal side, Malta has been running some of the highest deficits in Europe since Covid, and in July the European Commission has recommended an Excessive Deficit Procedure (EDP). However, despite the recommended EDP, Malta’s financial position in terms of the debt-to-GDP ratio remains strong.
Ultimately, forecasts for Malta show a mix of relatively robust, yet slowing - economic growth, with rising consumer pressures and indications of sector-specific slowdowns. This could suggest that while economic activity overall remains relatively healthy, sentiment may appear to be dipping as price pressures begin to affect consumption behaviour in certain local sectors.
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