Government election spending drives more than half of Malta’s economic growth

A major surge in government spending during the election period accounted for more than half of Malta’s economic growth in the second quarter of 2026, according to figures published by the National Statistics Office.

Malta’s economy grew by 4.5% in real terms between April and June when compared to the same period last year.

Gross Domestic Product reached €6.53 billion, an increase of €417.1 million, or 6.8% in nominal terms.

Yet the NSO figures show that the expansion was heavily supported by public spending during the quarter encompassing the general election.

Government final consumption increased by 14.7% in real terms, more than four times the 3.5% increase registered in household consumption.

Public consumption contributed 2.5 percentage points to Malta’s overall economic growth of 4.5%. In contrast, private consumption contributed 1.7 percentage points.

This means government consumption accounted for more than half of the country’s entire economic expansion during the quarter.

The contribution from government spending also increased sharply over the previous year.

In the second quarter of 2025, it added just 0.7 percentage points to growth, compared with 2.5 points this year.

Meanwhile, the contribution from private consumption declined from 2.4 percentage points to 1.7 points.

Domestic demand contributed 5.3 percentage points to growth, but this was partly offset by Malta’s external trade performance, which reduced the final growth rate by 0.7 points.

Exports of goods and services increased by 3%, while imports rose faster, by 4.1%.

The economy also remained overwhelmingly dependent on services.

Service activities contributed 4.3 percentage points to growth in gross value added, while industry contributed just 0.3 points. Agriculture and fishing had no measurable impact.

The strongest growth was registered in financial and insurance activities, up 12.2%, followed by information and communication at 9.2%, and professional, scientific and technical activities at 7.5%.

Gross National Income, which takes account of income flowing into and out of the country, reached €5.74 billion. This was almost €800 million below GDP, with the gap widening from €697.6 million a year earlier.

Nominal GDP per capita rose by 4.1%, from €10,547 to €10,976.

However, the population implied by the NSO’s figures increased by around 2.6%, meaning real economic growth per person was closer to 1.8% – well below the headline national growth rate.