Malta’s economic expansion over the past decade has been built almost entirely on hiring more people rather than getting more out of them, according to economic analysis published by the Malta Chamber of Commerce, Enterprise and Industry as part of its proposals for the 2026–2031 legislature.

The analysis, compiled with the support of EMCS Consultancy, breaks down Malta’s Gross Value Added growth between 2015 and 2025. GVA is a measure closely related to GDP that captures the value generated by economic activity in the country. Of the total 81.9% increase, 68.9% was attributable to an expanding workforce, 9.9% came from a shift towards higher value-added sectors, and just 3.1% came from workers becoming more efficient at what they do.

In headline terms, the decade looks strong. Real GDP grew from €11.34 billion in 2015 to €20.40 billion in 2025 — a cumulative real expansion of 79.9%, equivalent to a compounded annual growth rate of 6.05%. But the Chamber argues these aggregates mask a model that has now reached its limits. By the end of 2025, Malta recorded 9,544 vacancies against just 1,236 registered unemployed individuals — an economy operating at or near full employment, with no further room for labour-driven expansion.

A fiscal position more fragile than it looks

The analysis also takes aim at how Malta’s public finances are typically presented. In 2025, the General Government recorded a deficit of €545.3 million, or 2.2% of GDP, while public debt rose to €11.38 billion, or 46.4% of GDP — comfortably within the Maastricht threshold of 60%.

But the Chamber identifies two structural concerns. Capital expenditure represented just 11% to 14% of total government spending over the past five years, with the bulk going on recurrent costs that do not enhance productive capacity. And the apparent stabilisation of the debt-to-GDP ratio is being driven by GDP expanding faster than debt, not by any reduction in debt itself.

A less supportive external environment

The analysis notes that EU funding is set to become significantly less generous. As Malta has surpassed the EU average GDP level, its allocation under the next Multiannual Financial Framework is expected to decline, while EU co-financing rates are projected to fall from 60% to 40% — meaning a significantly larger domestic fiscal commitment will be required to maintain current investment levels, at precisely the moment the room to provide it is shrinking.