Malta’s Economy
Until 1800, Malta had very few industries except cotton, tobacco and shipyards. The shipyards, situated in the natural harbours around its oldest cities, including the capital city Valletta were used by the British for military purposes. At times of war, Malta's economy prospered due to its strategic location.
In 1869, the opening of the Suez Canal benefited Malta's economy greatly as there was a massive increase in the shipping which entered the port. In 1988, the Malta Freeport was established and is now a major maritime transhipment logistic centre in the Mediterranean region.
The old naval dockyards used by the British were then converted to operate as a commercial shipyard. Furthermore, Malta has developed close economic links with Libya, which in turn has invested heavily in property and commerce on the island as well as supplying the bulk of the oil that meets the island's energy needs. France has become the principal market for exports, followed by the USA, Germany, Singapore, the UK and Italy.
In the four decades since its Independence, Malta’s leaders have laid the foundations for a sustainable economy based on tourism, industry and services. The agricultural sector is small, with potatoes being the only major export commodity. Although Malta is an island, the fishing industry is also relatively insignificant. Malta produces only about 20% of its food needs, has limited freshwater supplies, and has no domestic energy sources.
Based on the island’s main economic resources being its geographic location and its productive, educated labour force, the country’s economy is primarily driven by service-based industries, including foreign direct investment in Information and Communication Technology. The economy is dependent on foreign trade (serving as a freight trans-shipment point), manufacturing (especially electronics), tourism and financial services. Malta joined the 2004 EU enlargement along with nine other countries.
The Maltese government entered the ERM II framework in May 2005, and has adopted the Euro as the country's currency on 1 January 2008. Furthermore, in December 2007 Malta has successfully lifted all border controls and checks between the Schengen Member States.
The Government of Malta has undertaken a long-term strategic plan intended to keep Malta at the forefront of the information technology and telecommunications sector in Europe.
Malta’s banking system is regulated by the Malta Financial Services Authority. On 1 May 2004 the Central Bank of Malta joined the European System of Central Banks (ESCB) and on 1 January 2008 it became part of the Eurosystem. The main objective of the Eurosystem and the Central Bank of Malta is to maintain price stability. In order to meet this objective, the Central Bank of Malta participates in the preparation and decision-making process of the Eurosystem’s monetary policy.
Malta’s economy in numbers
- Total GDP (EUR) 2012 estimate: 6.2 billion
- GDP per capita (EUR) 2010: 14,982
- GDP Growth in real terms 2010: 3.7%
- GDP Composition by sector: Agriculture 2%; Industry 23%; Services 75%
- Unemployment 6.6% (September 2011)
- Inflation Rate: 2.7% (September 2011)
- Sovereign Rating: A/A -1 (Standard & Poor’s 2010), A+ (Fitch, 2011)
- Accounting Standard: IFRS
- Registered unemployed (as at August 2011): 6,465
- Labour supply (as at 2nd quarter 2011): 354,645
- GDP at current prices (as at 2nd quarter 2011) (€ billions): 1.6
- GDP at constant prices (as at 2nd quarter 2011) (€ billions): 1.2
- Inflation rate 2010 (12-month moving average): 2.0%
- Internet users (2010): 245,480 (persons aged between 16-74).
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