The savings rate of Maltese households increased from 18.2% in 2024 to 19.2% in 2025, according to revised national accounts released by the National Statistics Office (NSO). The estimates also show that Malta’s value added at basic prices grew by 6% in nominal terms during the same year. This figure measures nominal economic growth.
Other newspapers are highlighting the net lending position of the national economy, which swung from net borrowing of €221 million in 2024 to net lending of €1.778 billion in 2025. However, this figure does not provide a particularly meaningful information.
The statistic measures the balance between the resources the Maltese economy provides to the rest of the world and those it receives. It is not a measure of how much money households have in their bank accounts, nor does it mean that Malta physically transferred €1.778 billion abroad. The figure is also heavily influenced by cross-border financial and income flows, including those involving financial corporations and non-resident clients. It can essentially mean absolutely nothing due to many variables and factors.
Households are saving more, but what does it tell us?
The increase in the household saving rate from 18.2% to 19.2% is one of the more relevant findings in the NSO’s release. It suggests that households saved a larger proportion of their gross disposable income in 2025 than they did in 2024.
However, the statistic should not automatically be interpreted as evidence that households are better off. A higher saving rate can reflect stronger income growth, lower consumption, precautionary saving in response to uncertainty, or a combination of these factors.
The NSO reported that gross disposable income per capita increased by 4.1% in nominal terms in 2025, while real gross disposable income per capita rose by 4.5%. The corresponding growth rates in 2024 were 11.6% and 7.9%, respectively.
These figures indicate that disposable income continued to increase, although the pace of nominal growth slowed considerably compared with 2024. The figures also need to be distinguished from the experiences of individual households, since national averages do not show how income growth was distributed across different income groups.
The household sector’s gross value added increased by 2.9%, from €3.281 billion in 2024 to €3.375 billion in 2025. Within this total, mixed income, which includes income generated by self-employed people and unincorporated businesses, increased by 9.9% to €1.753 billion. Gross operating surplus, meanwhile, declined by 6.8% to €1.208 billion.
Household investment also increased, with gross capital formation rising from €918 million in 2024 to €976 million in 2025. The household investment rate remained unchanged at 7.4% of gross disposable income.
Businesses continue to drive economic growth
The NSO’s figures show that non-financial corporations remained the principal driver of nominal growth in value added during 2025.
Value added generated by non-financial corporations increased by 7.6%, contributing 4.7 percentage points to the overall 6% increase recorded across the economy. The sector’s compensation of employees increased by 9%, while gross operating surplus and mixed income rose by 6.6%.
Despite the increase in operating surplus, its share of the sector’s gross value added declined from 55.7% in 2024 to 55.2% in 2025. This reflects the faster growth in compensation of employees relative to operating surplus.
Gross saving by non-financial corporations increased by 19.2%, from €2.391 billion to €2.849 billion. Their investment rate remained broadly stable at 18.3% of gross value added.
The figures suggest that companies continued to generate higher value added and savings, while maintaining a relatively stable investment rate. They do not, on their own, establish how much of the increase was attributable to higher productivity, additional employment, price changes or the performance of particular industries.
Government spending and borrowing
The general government sector also recorded an improvement in its financial position during 2025.
Government gross value added increased by 7.9%, from €2.618 billion to €2.825 billion. Gross disposable income rose by 9.7%, reaching €4.746 billion, while gross saving increased from €433 million to €527 million.
However, final consumption expenditure rose by 8.4%, from €3.893 billion to €4.219 billion. Government gross capital formation remained virtually unchanged at €741 million, compared with €742 million in 2024.
The financial sector’s outsized influence
Another development in the release is the change in the accounts of financial corporations.
Their gross value added actually declined by 0.7%, from €1.906 billion in 2024 to €1.893 billion in 2025. Gross operating surplus and mixed income fell by 8.6%, while compensation of employees increased by 8.7%.
However, as already noted, the lending and borrowing figure may not provide any meaningful information and the statistic needs to be broken down significantly to extract significant information.
Website Editor
Historian and Publisher
Leave a Reply