The Maltese economy has weathered the global economic turmoil relatively well, as recognised by the International Monetary Fund (IMF) in its latest Article IV Consultation Report. Between 2008 and 2010 Malta achieved an average real economic growth rate of +1.46% compared to the -0.63% recorded on average in the EU27. Besides, Malta was also one of the best performing countries in the European Union with respect to unemployment. During the month of August 2011 Malta registered an unemployment rate of 6.5% compared to 9.5% recorded on average in the EU27.
On the 25th of October 2011 Fitch confirmed Malta’s A+ credit rating. Chris Pryce, Director of Fitch Sovereign Group commented that: "Malta's rating reflects its continuing, if unspectacular economic recovery since the 2009 recession and the expectation that this will proceed with no more than a small deterioration in the growth rate in 2012."
On the 28th of October 2011, Standard and Poor confirmed Malta A/A-1 rating, whilst the Credit agency Moody’s awarded Malta a credit rating of A2.
In recent years, the Maltese economy has experienced major structural reforms and is continuing its diversification process towards a knowledge based economy. The Maltese services sector grew considerably. The Manufacturing sector has embarked on a gradual process to focus more on high value added manufacturing activities. In 2010 the Maltese manufacturing sector contributed to circa 13% of the total Gross Value Added (GVA) generated.
Foreign Direct Investment is a key driver of the Maltese economy. A stable macro-economic environment and good governance which in turn are complimented with an adequate business climate make Malta a lucrative destination for Foreign Direct Investors (FDI) to set up base. The legal infrastructure in Malta also encourages FDI. In fact, The Global Competitiveness report 2011-2012 ranks Malta 11th with respect to business impact of rules on FDI.
Malta can be considered as being a cost effective base for companies to set-up office. The Oxford Intelligence Medtech Report 2011 compares 22 locations within Europe in terms of the annual operating costs for a 100 person manufacturing plant. The report quotes that costs in Malta are 79% below the average. This makes Malta the cheapest location within Europe. Malta was also classified as being the cheapest location in terms of annual operating costs for a 50 person R&D facility. In fact, the report quotes costs in Malta to be 52% below the average of the 22 surveyed locations. Furthermore, the report highlights that only Malta and the Czech Republic can be considered as being low-cost destinations in Europe.
The Government through the document Vision 2015 and beyond: A path to a knowledge based economy, has identified a number of key economic pillars that the economy will seek to develop in order to ensure economic growth. The main economic pillars identified are:
Financial Services
Creative Industries
Tourism
Advanced Manufacturing
Transportation and Advanced Logistics
Life Sciences
International Educational Services
Malta’s strategic geographic location within the Mediterranean Sea together with its sophisticated business environment and cultural links with North African markets and the Middle East make it an ideal hub for trading, distribution and marketing operations between the three continents. To consolidate the strategic advantage the island has, substantial infrastructural investments were made in air and sea infrastructure. In fact, the Global Competitiveness Report 2011-2012 ranks Malta 16th out of the 142 countries surveyed with respect to the quality of port infrastructure and 19th out of the 142 countries surveyed with respect to the quality of air transport infrastructure.
Updated: November 2011
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