Malta’s economy continued growing at a relatively stable pace during the second quarter of the year, with real GDP increasing by 4.5% compared with the same period in 2025, according to the latest figures published by the National Statistics Office.
GDP reached €6.53 billion in nominal terms during the second quarter, an increase of €417.1 million, or 6.8%, from €6.12 billion during the same quarter last year. Once the impact of price changes is removed, economic growth stood at 4.5%.
The latest figures follow the 3.9% year-on-year real GDP growth originally recorded during the first quarter of 2026, indicating that Malta’s economy has maintained broadly similar growth momentum during the first half of the year.
Economic growth during the first quarter was already being supported heavily by domestic demand and increasing government expenditure. Government consumption had increased by 8.5% during the first three months of the year.
That trend became considerably stronger during the second quarter.
Government consumption rises by 14.7%
Final consumption expenditure increased by 6.7% in real terms, with household consumption growing by 3.5%.
Government final consumption expenditure, however, surged by 14.7% compared with the second quarter of last year.
Government consumption alone contributed 2.5 percentage points to Malta’s GDP growth, compared with a contribution of 1.7 percentage points from private consumption.
Overall final consumption contributed 4.2 percentage points to economic growth, while gross capital formation contributed another 1.1 percentage points.
Domestic demand consequently contributed 5.3 percentage points to GDP growth.
Foreign trade, on the other hand, reduced the overall growth figure by 0.7 percentage points.
Exports of goods and services increased by 3% in volume terms, but imports increased faster, rising by 4.1%. The stronger increase in imports therefore offset part of the growth generated domestically.
This continues a trend highlighted by The Maltese Herald following the first-quarter figures, when imports were also increasing faster than exports.
Gross fixed capital formation meanwhile increased by 5.1% in real terms.
Services continue driving Malta’s economy
Malta’s economic growth remains overwhelmingly driven by the services economy.
Gross Value Added increased by 5% in volume terms, with services contributing 4.3 percentage points to growth and industry contributing just 0.3 percentage points. Agriculture and fishing made no contribution to growth during the quarter.
The strongest expansion was registered in financial and insurance activities, which grew by 12.2%.
Information and communication activities increased by 9.2%, while professional, scientific and technical activities grew by 7.5%.
The figures reaffirm the increasingly dominant role of services in the Maltese economy, while the contribution from industrial activity remains considerably smaller.
Wages account for most of the increase in nominal GDP
The income side of the national accounts also shows that most of the €417.1 million increase in nominal GDP came from higher employee compensation.
Compensation of employees increased by €253.8 million compared with the second quarter of 2025.
Gross operating surplus and mixed income increased by another €136.6 million, while taxes on production and imports less subsidies increased by €26.7 million.
Gross National Income, which adjusts GDP for income flows between Malta and the rest of the world, was estimated at €5.74 billion, compared with GDP of €6.53 billion.
The GDP deflator, a broad measure of price changes across the economy, increased by 2.2%, down by 0.5 percentage points from the annual rate recorded during the first quarter.
Malta continues growing faster than the EU
Malta’s economic growth also remains significantly stronger than the broader European economy.
GDP increased by just 0.5% quarter-on-quarter across the European Union and 0.4% in the Euro area during the second quarter.
Malta had also been among the EU’s fastest-growing economies during previous quarters.
The latest figures show that Malta’s economic expansion remains strong and relatively stable. However, they also continue to show the extent to which growth is being supported by domestic consumption and, increasingly, rapidly expanding government expenditure, while foreign trade is currently acting as a drag on the headline GDP figure.
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