The IMF report, dated 23 November 2023, highlights that Malta has marked an impressive recovery from the pandemic and has shown considerable resilience to shocks stemming from international geopolitical tensions. With weaker external demand and waning post-COVID-19 lockdowns pent-up demand, growth is normalizing but is still expected to be among the highest in Europe. Persistent inflationary pressures are expected, while concern has risen about capacity constraints. Against this backdrop, the key policy priorities set out by IMF are reproduced below:

• Initiate a front-loaded fiscal tightening to rebuild fiscal buffers at a faster pace and help contain demand pressures. Prepare an exit strategy from the current generous energy subsidy policy and gradually implement it, with a view to containing fiscal costs and risks and enhancing incentives for energy conservation and transition, while protecting vulnerable populations.
• Maintain vigilance in monitoring financial sector risks, particularly in the areas of borrower creditworthiness, cyber security, and money laundering/terrorist financing.
• Boost structural reform efforts in innovation, digitalization, labor markets, education, and green transformation to achieve high, socially- and environmentally-sustainable, and inclusive growth.

IMF, November 2023 - Read the full report for more details.

See also:

• IMF Malta Chapter: reports, data, etc.