PwC Malta releases second economic outlook to 2024

PwC Malta has published its second Economic Outlook 2024, providing insights into global economic trends and forecasts for the coming financial year.

This edition of the report highlights that the forecasts for global economic growth of 2.7% and 2.6% for 2024 and 2025 respectively mask a slowdown in traditionally stronger economies such as China and the United States, while India continues to grow strongly and the relatively slower-growing eurozone picks up slightly.

Meanwhile, in Malta, official first quarter GDP data showed a slight slowdown in Malta’s quarterly GDP growth, from 8.7% in Q1 2022 and 6.4% in Q1 2023 to 4.6% in Q1 2024.

The slowdown in output in the first quarter of 2024 appears to be widespread across sectors, with manufacturing, ICT, professional services and retail all experiencing a slowdown during the quarter, while real estate and construction saw an uptick in performance.

From a spending perspective, food and beverage spending was down year-on-year, similar to spending on housing and furniture.

This contrasts with strong growth in spending on restaurants, hotels and entertainment.

In addition, consistent with the official GDP data, economic sentiment survey data also showed that the outlook for local businesses in Malta in 2024 is not optimistic.

Meanwhile, on the fiscal front, Malta has been running the highest deficit in Europe since the pandemic, with the European Commission recommending the adoption of an Excessive Deficit Procedure (EDP) in July.

However, despite the EDP recommendations, Malta’s financial position in terms of debt-to-GDP ratio remains strong.

Finally, the forecast for Malta shows relatively strong but slowing economic growth, rising consumer pressures and signs of slowing in some sectors. This may indicate that while overall economic activity remains relatively healthy, market sentiment may be declining as price pressures begin to affect consumer behavior in some local sectors.

The full report is available www.pwc.com/mt/en/publications/other/economic-outlook-2024-q2.html.