The EU Commission has today recommended to remove Malta out of the the Excessive Fiscal Deficit Procedure.
The EU Commission document says that:
“The government debt-to-GDP ratio increased from 45.9% at the end of 2024 to 46.4% of GDP at the end of 2025, thus remaining below the 60% of GDP reference value. The Commission Spring 2026 Forecast projects it to decrease to 46.2% by the end of 2026, driven by the lower primary deficit and the ‘snowball effect’ from real GDP growth and inflation.”
The deficit fell from 3.4% in 2024 to 2.2% in 2025. The EU Commission is forecasting a 2.6% deficit for 2026 and a 2.1% deficit for 2027, well below the 3% limit.
Malta entered the EFD procedure in 2024 after public expenditure surged with subsidies that were introduced during the Covid-pandemic lockdowns. The government’s finances have been improving in 2024 and in the months of this year with government revenue growing faster than government expenditure. However, a new wave of subsidies that were pledged during the general election campaign is incoming and these subsidies were not factored in the government’s original forecasts, leaving public finances and the deficit at an extended risk of being more further stretched than it is.
You can view the recommendation here.
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