Malta Budget 2027 | What matters to business

Economic outlook

Malta’s economy is expected to remain one of the fastest growing in the EU. Real GDP growth is projected at 4.1% in 2026 and 3.8% in 2027, supported by continued growth in tourism, exports, investment and domestic consumption.

Inflation is forecast to remain relatively contained at 2.5% in 2026 and 2.7% in 2027, helping preserve household purchasing power. Unemployment is expected to remain low at approximately 3.3% in 2026 and 3.2% in 2027.

The Government is projecting a fiscal deficit of 2.6% of GDP in 2026 and 2027, remaining below the EU's 3% threshold. Government debt is forecast to stand at 46.7% of GDP in 2026 and 46.8% in 2027, remaining comfortably below the EU benchmark of 60%.

The 2027 Budget is centred on maintaining economic growth while shifting Malta towards a more productive, technology-driven and higher-value economy, with continued support for households through energy subsidies and social measures.

Social measures

• COLA increase of €6.41 per week for employees.
• Enhanced COLA mechanism retained, with additional payments ranging from €200 to €1,500 annually depending on household income.
• National Minimum Wage increases by €10.41 per week, including COLA.
• Retirement, widow's and invalidity pensions will increase by €10 per week, including COLA.
• Pension tax exemption threshold increased to €37,624, resulting in more pensioners paying no income tax.
• Maximum pensionable income increased to €28,000 for eligible pensioners born pre-1962.
• New pension contribution transfer mechanism between spouses, expected to benefit approximately 3,200 women.
• Carers Grant increased to €7,500 per annum while Carer-at-Home Benefit increased to €9,800 per annum.
• Families with children will continue benefiting from increased tax-free income thresholds:

       o Married couple with one child: threshold increases to €20,000 in 2027.

       o Families with two or more children: threshold increases to €30,000 in 2027.

• Super Bonus payment introduced, granting:

       o €1,000 tax-free to workers earning more than €12,000 annually.

       o Reduced amounts ranging from €500 to €925 for lower-income earners.

• Energy, gas and fuel prices remain frozen, with Government continuing to absorb international price increases through subsidies.