National reform programme 2008-2010 Malta - European Commission

Macroeconomic Policies
Recent Economic Developments
The Maltese economy sustained upbeat economic growth during 2007 for the third year in a
row. In fact, during 2007, GDP grew by 6.3% in nominal terms and by 3.7% in real terms.
Moreover, GDP growth remained relatively strong during the first two quarters of 2008
reaching 3.3%, only marginally below the 3.5% growth rate registered during the same period
in the previous year. Economic growth during 2007 as well as during the first two quarters of
2008 was mainly sustained by domestic demand.
The recent international economic developments pose downside risks to the outlook for the
Maltese economy. In particular, the financial turmoil and the slowdown in major economies
around the world pose a significant challenge. Furthermore, the relatively high international
prices of oil and food commodities also pose additional risks. Table 04 shows the
development of the main economic indicators over recent years.
The level of Malta’s GDP per capita in purchasing power standards has remained fairly stable
around the 77.5% mark during the past four years thus continuing to be appreciably below the
EU27 average. This highlights that real convergence of living standards in Malta with the
EU27 average remains an important issue for the national economic policy agenda.
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