IMF has concluded Article IV consultation report for Malta on Feb 22, 2019. According to IMF
Malta has been one of the fastest growing countries in Europe post-crisis, thanks to rapid rebalancing toward export-oriented services, notably remote gaming. And the authorities have recently started to explore new development areas around the blockchain technology.
Growth remains rapid and increasingly driven by domestic demand, but a cyclical peak may have been reached. GDP is estimated to have expanded by 6.4 percent in 2018. Despite tight labor market conditions, generalized wage and price pressures are yet to materialize.
Strong inflows of foreign workers have helped keep wage pressure contained, but they are also putting rising pressure on infrastructure and housing prices.
The fiscal balance is estimated to have registered a surplus in 2018, owing to favorable economic conditions and buoyant proceeds from the Individual Investor Program. The current account balance has remained on a positive trend, driven by a continued surplus in services. Over the medium term, growth is projected to gradually moderate to slightly above 3 percent as wage and inflation stabilize and the current account surplus remains large, driven by strong export of services.
The banking system remains well-capitalized, liquid, profitable and resilient, but faces some challenges. The FSAP stressed shortcomings in banking supervision—which extend to the implementation of the anti-money laundering and countering the financing of terrorism (AML/CFT) framework—and weaknesses in the bank liquidation and insolvency framework.
IMF Directors encouraged the authorities to maintain a prudent fiscal policy, and called for further efforts to strengthen the structural fiscal position excluding revenues from the Individual Investor Program (IIP).
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