Economy of Malta

The economy of Malta is a highly industrialised service-based economy. It is classified as an advanced economy by the International Monetary Fund and is considered a high-income country by the World Bank and an innovation-driven economy by the World Economic Forum. Malta joined the European Union and started using the euro currency on 1 January 2008.

Malta has many strengths in its economy. Its location in the middle of the Mediterranean Sea makes it a crossroads between Europe, North Africa and the Middle East. The country has a fully developed open market economy, a multilingual population—88% of people speak English—and a productive labour force. It also has low corporate tax rates and well-developed finance and technology sectors. The economy depends on foreign trade, making things like electronics, tourism, and many services.

In 2024, Malta’s GDP per person, adjusted by what things cost to buy, was $67,682, ranking 15th among EU countries. In 2015, Malta had a low unemployment rate of 5.9%, placing it sixth among EU countries. The country is also seen as one of the more democratic places in the world.

Transport

Malta has an airport called Luqa International Airport and two major ports: Malta Freeport and Valletta Cruise Port. The Malta Freeport handles cargo ships and imports, while the Valletta Cruise Port is for cruise ships only. In 2022, the Malta Freeport handled many ships carrying containers, and in 2023, the Valletta Cruise Port welcomed many visitors.

Luqa International Airport serves many airlines and destinations. In 2023, millions of people traveled through the airport, which helped bring in a lot of money for Malta's economy. One of Malta’s airlines, KM Malta Airlines (formerly Air Malta), and a newer airline, Universal Air, also operate from this airport. These airlines and related businesses provide jobs for thousands of people.

History

In the 1200s, the people of Malta grew cotton and cumin to sell to other countries. This helped them grow in number and jobs. Later, during wars in the 1800s, Malta became a busy trading place for ships carrying goods.

When the Suez Canal opened in 1869, even more ships stopped at Malta for coal and supplies. This brought more jobs and growth. But by the late 1800s, bigger ships that used oil instead of coal stopped needing Malta, causing problems. After World War II, Malta’s importance changed again with new technology.

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Modern economy

The economy of Malta depends on trading with other countries, making things like electronics and medicines, and welcoming tourists. Malta started using the Euro currency on January 1, 2008.

Tourism has grown a lot since 1987, even though it faced a small drop after the September 11 attacks. With good economic conditions and support for businesses that sell things to other countries, Malta’s economy has grown quickly. Even with some challenges, prices have stayed steady. Malta is good at making high-value products like electronics and medicines, and many foreign companies operate there. Tourism helps make up about 15% of Malta’s total money. Making films is also becoming more popular in Malta.

From 2001 to 2005, Malta’s economy grew very slowly because tourism and other industries were not doing as well. Unemployment was at its lowest in three years at 4.4%. Many companies that used to be owned by the government are now being sold to private buyers, and the market is becoming more open.

Energy

Main article: Energy in Malta

Even though Malta has good potential for solar and wind power, it gets almost all its electricity from oil that it imports. The high cost of energy was a big topic in the 2013 election.

Industry

Banking

Main article: List of banks in Malta

Agriculture

Main article: Agriculture in Malta

Farming is a small part of Malta’s economy, making up about 0.7% of its total money. Malta grows many different crops, such as potatoes, olives, and tomatoes. The country also raises animals like cows, goats, pigs, and chickens.

Statistics

Malta produced around 1,620 GWh of electricity in 1998, mostly from fossil fuels. It used about 1,507 GWh of electricity that year and did not export or import any electricity.

The country grew many foods such as potatoes, cauliflower, grapes, wheat, barley, tomatoes, citrus, cut flowers, green peppers, pork, milk, poultry, and eggs. Since January 1, 2008, Malta has used the euro as its currency, with 1 euro equal to 100 cents.

Companies

Companies in Malta sell a lot of things every year, making about €88 billion in total. The top company is called ALKAGESTA LTD, with sales of €2.075 billion. Other big companies include HC TRADING MALTA LIMITED and ADVAITA TRADE PRIVATE LIMITED, with sales of €1.346 billion and €1.253 billion, respectively.

Poverty

Poverty and social exclusion are important issues in Malta. In 2008, about 15% of people in Malta lived below the poverty line, which was a little better than the average in the European Union at that time.

On December 24, 2014, Malta introduced a National Strategic Policy for Poverty Reduction and Social Inclusion to help families in need. This policy covers areas like social services, health, education, and employment, and it was planned to help people from 2014 to 2024. Many groups will work together to find ways to support families facing hardships in Malta.

Unemployment system

Unemployment benefits in Malta are given out in two ways: based on past work contributions or through a means test for the head of a household. To get these benefits, a person must be able to work and have registered as unemployed.

There are three groups in the Malta registrar of unemployment. The first group includes people who have never worked. The second group is for those who left or lost their jobs. The third group is for people who are working but looking for other jobs. Benefits are paid for 156 days, after which people may qualify for further assistance based on their financial situation. People eligible for unemployment benefits include Maltese citizens aged sixteen or older, those in eligible work-study programs, and citizens outside Malta working for foreign companies.

The system has been adjusted over time to encourage more people to work. After changes in 2013, the number of people receiving unemployment benefits dropped significantly. A new "in-work" benefit was introduced to help families with children, with payments depending on income and family situation. This benefit is paid four times a year.

The rate of women participating in the workforce in Malta is lower than men’s. Many women who do not work do not receive unemployment benefits because these benefits usually require prior employment. However, women who are in the workforce tend to be younger and more educated, which helps keep the long-term unemployment rate for women lower than for men.

Pensions system

Malta has both public and private pension systems. People who are employed contribute to one type of pension, while those who work for themselves contribute to another type. Over time, the age at which people can start receiving pensions has changed. For example, someone born in 1953 could start getting pensions at age 62, while someone born in 1960 had to wait until age 64. To get a pension in Malta, a person also needs to have contributed to the system for a certain number of years.

There is also a special program in Malta for foreign pensioners. If a person's income comes mostly from pensions, they can live in Malta and get a special tax status.