Detailed Review of Malta’s Economy
Since its independence, Malta has managed to “get by” on strong, sustainable growth until it slowed slightly at the beginning of the 21st century. The country weathered the financial crisis well due to its reliable banking system. Maltese growth is projected at 2.9% in 2014.
The main asset of the country from the economic point of view is its tourist appeal, which attracts a million people each year accounting for 30% of GDP. Production of electronic and pharmaceutical goods is also a major sector accounting for 20% of GDP and 75% of the country’s exports. Malta imports a large amount of raw materials and energy to compensate for its total lack of natural resources.
The country trades mainly with the United States, the European Union and Singapore and takes advantage of its location to establish itself as a mandatory intermediary for trade between the North and South of the Mediterranean. Its trade balance has long been negative but seems, in recent years, to be tending towards equilibrium again.
Malta’s Economic Strengths
- Malta is part of the European Union.
- Low tax.
- Not bureaucratic business infrastructure.
- Stable political and economic system.
- Affordable and skilled workforce.
- Tax advantages and incentives for investors.
- Well-maintained and modern infrastructure.
- Foreign investment is becoming increasingly important.
Malta’s Economic Weaknesses
- Small internal market (around 400,000 people).
- Relatively low standard of living for an EU member state.
- Economy dependent on tourism.