Malta’s strong GDP growth is set to continue as domestic demand replaces net exports as the main engine of economic activity, according to the European Economic Forecast for autumn.
The report says that the internationally oriented services sector continued to underpin the large current account surplus and inflation was expected to pick up as wage pressures started to gain pace. The government balance was projected to moderate but remained in surplus.
The report says that GDP rose by 6.7% in 2017, driven by strong growth in net exports. In the first half of 2018, real GDP growth slowed moderately compared to 2017.
Private consumption growth accelerated, while net exports declined as a result of rapid import growth in the second quarter. Business and consumer confidence indicators remained high and real GDP growth was expected to average 5.4% in 2018.
Growth was expected to gradually ease over the forecast horizon to an annual average rate of 4.9% in 2019 and 4.4% in 2020.
Domestic demand was set to be the main driver of growth, supported by strong investment growth.
Various investment projects co-financed by EU structural funds would boost public investment in the second half of…
