Malta’s economic growth has stayed ahead of the euro area, but the pace is starting to converge
In 2025, Malta’s year-on-year growth remained robust at 4.0% but represented a slowdown when compared to 6.2% in 2024. This compared to growth of 1.4% in the euro area, up from 0.9% last year. While Malta still outpaces the EU average, the gap is narrowing as domestic momentum softens somewhat and the eurozone rebounds slowly.
Over the course of 2025, expenditure growth in Maltese economy was mostly in the restaurants and hotels sector, followed by education, ICT, recreation and health sectors. Meanwhile, expenditure growth on food and beverages, personal care, and alcohol and tobacco was slower.
From a sectoral gross value-added (GVA) perspective, Malta’s 2025 growth reflects positive performance in the ICT sector, the wholesale and retail industry (which includes hotels), and the public sector. On the other hand, professional services, finance, construction, and arts and recreation all experienced slower growth of below 2%, while manufacturing and real estate were more or less flat.
Analysing on a per-person basis, i.e. controlling for the effects of population growth, shows that both GDP per capita and consumption per capita grew only marginally in 2025, increasing by just 1.6% and 1.2% year on year, compared to a CAGR of 4.5% and 5.8% respectively over the past 5 years.
Source: NSO, PwC analysis
In fact, per capita growth rates for GDP and consumption appear to have converged with those of the euro area, as seen in the charts below – implying that on a per-person basis, Malta’s performance in 2025 was similar to that of our European peers.
On a quarterly basis, this declining trend in output and consumption per person emerges more clearly, starting in mid-2024 and continuing throughout 2025, as both measures declined from around 5%-6% in 2023 to 1%-2% by 2025.
Source: NSO, PwC analysis
Meanwhile, productivity in Malta also appears to be slowing. Official data show that GVA per worker in Malta has increased from €55k in 2021 to €67k by 2025, implying a compound annual growth rate (CAGR) of 3.7% per annum over the past 5 years. This growth has decreased substantially in 2025, falling from 5.1% in 2024 to 1.4% last year.
At a sectoral level, the more productive sectors remain ICT, professional services and finance, with annual GVA per worker in 2025 of €162k, €93k, and €76k respectively. This compares to significantly lower value-added per worker generated in other sectors such as wholesale and retail, construction, and the public sector, as outlined in the chart below. The arts and entertainment sector (which comprises iGaming activities) and manufacturing are towards the middle of the pack, at €51m and €41m GVA per worker in 2025, respectively.
Analysing productivity alongside growth reveals an interesting consideration: the most productive sectors are not the fastest growing. In fact, looking at growth data for both 2024 and 2025, some of the fastest growing sectors over the past two years appear to be the least productive, such as public sector and wholesale and retail. With the exception of ICT, the most productive sectors such as professional services, finance, and iGaming are growing relatively slowly at 2.1%, 2.2%, and 0.9% respectively over the past two years.
Conclusion
Overall, while Malta’s GDP continues to exhibit headline growth above that of the euro area, the economy appears to be moderating. This is more pronounced when considering economic activity on a per-capita basis, with GDP and consumption growth per person of just 1.6% and 1.2% respectively in 2025, more or less in line with our euro area peers.
Malta’s long-term growth ultimately depends on growth in productivity, which in 2025 appears to have flattened. In fact, at a sectoral level, the more productive sectors appear to be underperforming the economy, with the lower productive industries exhibiting some of the faster sectoral growth rates.
Over the past decade, economic activity in Malta always outstripped Malta’s population growth, such that, on a per capita basis, the economy continued to grow at robust rates. However, it would appear that in 2025, such growth on a per-person basis is starting to flatten.
Contact us
