Malta’s 2027 pre-budget outlook: Economy, households and investment

Malta’s Pre-Budget Consultation Document for 2027, published in September 2026, sets out the economic outlook and the government’s priorities ahead of Budget Day. While not the final Budget, it brings together existing measures and projects under way, while providing a meaningful indication of longer-term plans.

The figures point to a relatively strong fiscal starting position, despite some inevitable decisions on the horizon. Malta’s debt and deficit are below the EU’s 60% and 3% of GDP reference values, respectively, but energy-price protection remains a substantial recurring cost. The consultation identifies those pressures and investment priorities; Budget Day will show how the government intends to balance them.

Economic and fiscal outlook

• Growth and public finances. The document cites European Commission forecasts of 3.7% real GDP growth in 2026 and 3.6% in 2027. Malta’s deficit stood at 2.2% of GDP in 2025; the Commission forecasts 2.2% in 2026 and 2.1% in 2027, both below the EU’s 3% reference value. Public debt stood at 46.4% of GDP in 2025, below both the EU’s 60% reference value and the EU average. That is a favourable starting position, though it does not, by itself, establish how much can be spent sustainably.

• Energy-price stability. Keeping electricity and fuel prices stable for households and businesses remains a priority. The document estimates €391.7 million in energy subsidies for 2026, equivalent to 1.4% of GDP. This illustrates the scale of the protection being maintained; albeit this is a 2026 estimate, not an announced 2027 allocation.

• Long-term growth. The document identifies skills, investment and technology as important to Malta’s competitiveness. It also reports that while real gross value added per worker employed grew 2.2% in 2023 and 0.2% in 2024, it fell by 0.1% in 2025, even as the economy continued to expand.

Households, tax and key sectors

• Income tax. The three-year reform introduced in Budget 2026 is being phased in through 2028. It progressively expands tax-free thresholds and lower-rate tax bands for eligible households with dependent children. The consultation describes the scheduled 2027 phase of an existing reform, not a newly proposed income-tax change.

• Family and pension support. Measures introduced in 2026 include an additional €250 a year per dependent child for families with annual income below €30,000. The document also reviews a €5.34 weekly discretionary pension increase, in addition to the €4.66 cost-of-living adjustment, a €75 increase in the elderly grant for people aged 75 or over living independently or in private residential care, and an income-tax exemption on pension income up to €37,104. These are previously announced measures, not new 2027 commitments.

• Industry activity. Services remain central to Malta’s external economy. The pre-budget document reports that gaming accounted for 37.9% of exports in 2025. Tourism also grew: according to the National Statistics Office, inbound arrivals rose 16.4% and total tourist expenditure increased 14.3% between January and April 2026 compared with the same period a year earlier. Performance elsewhere was mixed; manufacturing output contracted in 2025 even as employment grew, the information and communication sector recorded stronger productivity, and construction faced rising real unit labour costs.

Investment priorities

• Electricity and energy security. Grid reinforcement continues, alongside work on a second Malta–Italy electricity interconnector. The document says the interconnector is supported by approximately €260 million in eligible EU regional-development funding and a €100 million European Investment Bank loan; these are financing sources, not a stated project-cost total. Two battery-storage projects are being developed with €35 million in EU funding. Together with plans for further interconnection, these projects are intended to strengthen security of supply and support the integration of renewable energy.

• Water and wastewater. Planned projects for 2026–2031 include a new desalination plant at Ħal Far (€86 million) and wastewater-treatment upgrades (€56 million). The document also notes investment of over €21 million in the Malta South New Water extension and a €35 million tender for a new reverse-osmosis plant at Għar Lapsi. These are multi-year projects at different stages, not amounts that will all be spent in 2027.

• Health and education. Construction began in 2026 on an extension to Mater Dei Hospital’s emergency department and a new acute mental-health unit. The document describes a longer-term masterplan for Gozo General Hospital and priorities in primary care, literacy, curriculum development, inclusion and digital learning. It does not provide a budget amount for every initiative.

Taken together, the consultation points to a Budget Day focus on continued energy-price protection, phased household tax relief and investment in essential infrastructure and public services. It also makes the case for greater fiscal discipline, without yet showing how those priorities will be reconciled in the 2027 Budget.

This summary is based on the official Pre-Budget Consultation Document for 2027 published by the Government of Malta.

For further details and live updates, please visit our dedicated Malta Budget 2027 page.