The smallest economy in the EU zone, Malta has a highly industrialized and service-based economy. The latest reports on the country’s economy show that the country’s agricultural sector had an estimated contraction of 12.5% in 2020. The major reason for this was the crisis created by the COVID-19 pandemic.
18% of the workforce in the country is employed by the industrial sector. This sector represents 12.5% of the GDP. The country’s economy is primarily based on the manufacture of pharma products and microchips. The manufacturing sector contributes 7% of the country’s GDP. In 2020, it reduced to 5% due to the COVID-19 crisis.
The tertiary sector represents 75.6% of the country’s GDP. 81% of the workforce of the country is employed in the tertiary sector. The tourism sector of the country powers the economy of Malta. This sector contributes to the GDP at one of the highest rates in the EU. With the COVID-19 crisis, this sector got highly affected. There was a dip of 75% in the number of visitors to the country in the period from January 2020 to November 2020.
Similarly, the accommodation and food services sector saw a decrease of 65.5%. The dip was 31.1% for transportation & storage and 18.1% for wholesale and retail trade.
But the forecast for Malta’s economy for 2021 done by the European Commission has some interesting news. The following are the main observations:
- Malta’s economy will grow by 4.5% in 2021.
- Though Malta’s economy contracted at the third-largest rate in the EU, its effect was partially mitigated by the stimulus measures of the Government of Malta.
- The strain on Malta’s open economy in 2020’s last quarter continues in the first quarter of 2021.
- It’s expected that the implementation of COVID-19 vaccination and gradual lifting of restrictions in the EU will bring Malta’s tourism industry back on track.
- In 2022, Malta’s economy is expected to expand by 5.4%. At that point, net exports will again be the main contributor to the growth of GDP. Domestic demand will make a steady but slower contribution.
- The growth prediction for Malta is the largest considering all EU member states. The main contributor to economic recovery will be the tourism industry.
- In 2021, it’s expected that inflation will rise to 1.3% in the backdrop of recovering domestic demand as well as increased demand for services in the tourism sector.
- In 2022, going with a stronger economic recovery, inflation will rise to 1.6%.
So, Malta definitely looks like it’s going to have a positive trend in economic growth which will definitely open up greater opportunities for skilled international workers.
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