Robust growth but challenges ahead

A1

LOW RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

Last updated in March 2023.

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GDP USD17bn (World ranking 126, World Bank 2021)
Population 0.5mn (World ranking 171, World Bank 2021)
Form of state Republic
Head of government Robert Abela (PM)
Next elections 2027
  • Strong economic and robust employment growth before the outbreak of the Covid-19 pandemic
  • Investor-friendly tax regime with considerable tax exemptions and incentives, which compensate for a relatively high corporate tax rate
  • Solid public finances and favorable household and corporate debt levels
  • English-speaking productive workforce, relatively low labor costs compared to other EU members
  • High trade openness entails vulnerability to an unstable external environment
  • Strong export dependence, especially on electrical machinery and equipment (mainly semiconductors) and petroleum
  • Brexit and the Covid-19 pose major risks to tourism industry (high number of UK arrivals)
  • Growing size of the strongly internationalized financial sector while being listed as (cooperative) tax haven by the OECD
  • Needs structural reform in R&D and human capital training to raise growth potential

Trade structure by destination/origin

(% of total, 2021)

Exports Rank Imports
Germany 11.7%
1
13.4% Italy
China 7.7%
2
12..0% Korea, Republic of
Italy 7,5%
3
9.8% China
France 6.1%
4
9.0% China
Singapore 4.7%
5
4.3% Germany

Trade structure by product

(% of total, 2021)

Exports Rank Imports
Electrical machinery, apparatus and appliances, n.e.s. 28.7%
1
27.8% Other transport equipment
Medicinal and pharmaceutical products 13.8%
2
27.7% Petroleum, petroleum products and related materials
Miscellaneous manufactured articles, n.e.s. 13.2%
3
6.2% Electrical machinery, apparatus and appliances, n.e.s.
Petroleum, petroleum products and related materials 11.9%
4
3.2% Medecinal and pharmaceutical products
Fish, crustaceans, molluscs and preparations thereof 4.5%
5
2.0% Other industrial machinery and parts
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