Malta Budget 2021 - An Overview

With the COVID-19 pandemic continuing to act as a tax on human activities, various economies worldwide have been negatively effected, including Malta's. On Monday 19th October, Minister of Finance Prof. Edward Scicluna announced various key measures as part of the 2021 budget in a bid to minimize this negative impact on the country's economy. 

A rundown of 2020

• Malta is expecting a reduction of 7.4% in its GDP over 2019, which is expected to stand at €12.5bn.
• The deficit is expected to be around 9.4% of the GDP. A significant decrease from the 1.4% surplus expected prior to the pandemic.
• Debt is set to increase to 55% of the GDP in 2020​. 
• Tourism sector took the hardest hit with inbound tourists, up to July 2020, downing to 419k from the recorded 1.5m in the previous year.
• Unemployment rate as at August 2020 stood at 4.1%, a rate which is still significantly below the EU average (8.1%).
• The 12-month moving average inflation rate in August 2020 stood at 1.1%.

Forecast for 2021

• A recovery of the economy is expected in 2021 with a growth of 5% in real terms and 6.4% in nominal terms.
• This growth is excepted to generate 7.5% in investment and 3.7% in private consumption.
• Exports set to increase by 5.5%.
• An increase of 2.3% in jobs is expected next year with unemployment set to remain hovering around 4%.

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