Watch this space for exclusive, real-time coverage of Malta's 2027 Budget, presented by the Minister of Finance, Hon. Clyde Caruana on Monday, 26 October.
Malta Budget 2027
For yet another year, we will be closely following the Malta Budget 2027 live and sharing what it means for you in real time. We’ll bring you live commentary, detailed insights, a full post-budget report, and a series of reels to help you break down and understand the key measures. Closer to the budget, we will also be launching a new segment where your business can submit questions on the budget measures and we’ll respond, discuss the implications with you, and support you where we can.
Key takeaways from the Minister for Finance's pre-budget conference
With the Malta Budget 2027 scheduled to be presented later this month, the Minister for Finance recently addressed stakeholders during the annual pre-budget conference, providing an update on Malta's macroeconomic outlook and the key considerations informing this year's budget.
Below, we summarise some of the principal themes highlighted during the event.
Energy subsidies
- Energy-related expenditure is projected to amount to approximately €500 million in FY27, comprising:
- c.€400 million in subsidies
- c.€100 million in energy-related infrastructure investment
- Subsidy expenditure is expected to remain at around €400 million in both FY26 and FY27.
- The Minister indicated that Government intends to retain energy subsidies in the upcoming budget despite the significant fiscal cost associated with these measures.
- During the conference, estimates were presented regarding the potential macroeconomic impact of removing energy subsidies:
- GDP could decline by approximately €600 million.
- Private consumption could fall by around €312 million.
- Employment levels could contract by approximately 3,000 persons.
- Unemployment could increase by approximately 2,500 persons.
- The COLA adjustment could rise to 18.05c.
Macroeconomic indicators
- Economic growth is projected at approximately 3.7% in FY26, following growth of 4.7% in 2025.
- Inflation is currently around 2% and is expected to remain broadly at this level in FY27.
- The fiscal deficit is expected to reach 2.8% of GDP in FY26, up from to 2.2% in FY25.
- While this projected deficit is higher than earlier expectations, it remains below the EU's 3% reference threshold.
- Government debt is expected to remain relatively contained, with the debt-to-GDP ratio standing at approximately 45.8%.
- The Minister also provided a breakdown of factors contributing to the accumulation of public debt over recent years:
- 30% attributable to energy support measures.
- 23% attributable to COVID-19-related measures.
- 10% attributable to Air Malta-related interventions.
- 5% attributable to income tax reforms.
- 30% attributable to other expenditure items.
- 2% attributable to one-off measures.
Potential budget themes
- The continued funding of energy subsidies appears likely to remain one of the central features of Malta Budget 2027.
- Demographic challenges featured prominently during the discussion, particularly Malta's declining birth rate and the broader implications for the labour market, public finances and long-term economic sustainability. Similar concerns were highlighted by the Minister in the pre-budget consultation process earlier this year.
- This may suggest further measures aimed at supporting families and encouraging family formation, although no specific measures were announced.
- The Minister also indicated that not all electoral manifesto commitments are expected to be implemented in this year's budget, suggesting a degree of prioritisation in light of current fiscal pressures.
Concluding remarks
- The conference highlighted the trade-offs currently facing policymakers as they seek to balance economic growth, fiscal consolidation, and social support measures – against a backdrop of higher energy costs and a general uptick in inflation across most countries.
- While Malta's growth outlook remains comparatively robust and key fiscal indicators remain within EU thresholds, the continued cost of energy subsidies is likely to constrain fiscal space available for additional initiatives.
- Based on the themes discussed, Budget 2027 is likely to place significant emphasis on energy affordability, fiscal sustainability, and longer-term demographic considerations.
Get in touch
Click on a name to send an email.
At the back, from left to right: Steve Gingell, Francesca Fenech, Neville Gatt, Lucienne Pace Ross, David Ferry, Bernard Attard, and Chris Mifsud Bonnici.
In front, from left to right: Mirko Rapa, Edward Attard, Stefan Diacono, Mark Lautier, and Michael Borg.
or call us on +356 2124 7000.