Malta’s economic growth has stayed ahead of the euro area, but the pace is starting to show signs of slowing, with Q1 and Q2 at 3.7% and 2.7% respectively.
In Q2 2025, Malta’s year-on-year growth slowed to 2.7%, decelerating further from 3.0% in the previous quarter and continuing a downward trend from the comparatively higher rates achieved in previous quarters in 2023 and 2024. In contrast, the euro area showed signs of recovery, with growth rising to 1.5%, its strongest pace in over a year. While Malta still outpaces the EU average, the gap is narrowing as domestic momentum softens and the eurozone gradually rebounds.
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 remained more or less flat during the first half of 2025, compared to a CAGR of 3.4% over the 2019-2024 period.
On a quarterly basis, the data show that in Q2, real GDP per capita increased by just 0.2%, while consumption per capita declined by 0.3%. This continues a downward trend observed since 2024, when both output and consumption per head registered rates of around 3-5%, after growing at around 6%-9% in 2023.
In fact, Malta’s population growth over the past decade has been significant, increasing by 124k people, from 450k in 2015 to 574k in 2024. Official figures for 2025 are not published yet, but inferring from the most recent GDP per capita NSO data, implies a most recent headcount estimate of 581k as at mid-year 2025.
Meanwhile, tourist arrivals have been strong in the first half of the year, peaking at 440,000 for the month of August. Estimated at 3.5million bed nights, this equates to an average of 110,000 increase in population on the island on any given day during that month. Altogether, this would imply that Malta’s population can be argued to have peaked at over 690,000 in August 2025, compared with 675,000 in the same month last year.
Conclusion
Malta’s economic performance in Q1 and Q2 2025 suggests a moderation in momentum. While total output and spending continue to rise, such growth appears to have declined to match population growth rates, implying that activity on a per-capita basis has been more or less flat during the first half of the year.
Sectoral data reveals a mixed picture: externally focused sectors such as accommodation and restaurants, as well as ICT and financial services continue to outperform. However, traditionally productive and high growing sectors such as professional services and gaming appear to be slowing in both Q1 and Q2 of 2025.
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 the first half of 2025, such growth is flattening. The next two quarters of the year will provide more insight into whether this is indeed a trend for the full year or just a quarterly observation.
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