Analysis
12 Oct 2025
8 minute read
Malta Budget 2026: Strategic priorities and fiscal framework
Overview of Malta’s Pre-Budget Consultation Document for 2026
Malta’s Pre-Budget Consultation Document for 2026, published on the 12 September 2025, sets out the government’s planned fiscal and economic measures for the upcoming year. The document outlines projections, allocations, and policy priorities aimed at supporting economic growth, sustainability, and social welfare.
1. Economic outlook
- Real GDP growth: 5.9 % in 2024; forecast of circa 4 % for 2025–26 period;
- Debt-to-GDP: 47.4 % in 2024 – below the EU’s 60 % threshold, and expected to remain below the 50% mark in the short to medium term;
- Deficit: 3.7% in 2024 and forecast of 3.3% in 2025;
- Inflation: easing toward the 2 % target;
- Employment: record participation rate at over 80% in early 2025 and among the EU’s lowest unemployment rates in 2024 at 3.1%;
- Malta to retain existing energy subsidies; and
- Risks outlook demographic challenges in terms of ageing population and low fertility rates, external price shocks, housing and infrastructural strains.
2. Fiscal strategy and public finances
- Goal: Deficit of less than 3% of GDP by 2026;
- Approach: “discipline with support” – targeted spending, improved efficiency and no new taxes;
- Debt to GDP ratio: stable within EU limits and below the 50%;
- Deficit: Malta is on track to exit the excessive deficit procedure (EDP) by 2026, ahead of the original deadline; and
- Tools to achieve the necessary targets: better tax compliance, digital revenue systems, transparent procurement.
3. Social and family measures
- Enhanced cost of living adjustment (COLA) mechanism to be retained in order to offset cost of living increases;
- Income-tax relief: families to gain “hundreds of euros per year”;
- Support: aimed towards pensioners, single parents, disability and care allowances expanded; and
- New family policy: Social Plan for the Family 2025–2030 to tackle low fertility rates.
4. Human capital and skills
- Focus: education reform, lifelong learning and research and development funding;
- Workforce alignment: digital and green skills training, industry-academia links; and
- Public service reform: efficiency and performance orientation.
5. Infrastructure and green transition
- Energy: investments in battery storage, support for large scale renewables projects and strengthening interconnection capacity;
- Waste and resource management: Expand the ECOHIVE project and explore circular economy measures;
- Transport: congestion relief, park-and-ride, digital traffic systems; and
- Land use: review of Strategic Plan for Environment and Development (SPED), planning framework; stricter enforcement against unauthorised developments.
This summary is based on the official Pre-Budget Consultation Document for 2026 published by the Government of Malta.
For further details and live updates, please visit our dedicated Malta Budget 2026 page.
André Fenech
Deloitte - Malta
André Fenech joined Deloitte Malta as Senior Manager in the Financial Advisory business within the Government and Public Sector Unit with specific focus on market intelligence, policy advisory and other public sector initiatives. Previously, André worked with the Malta Chamber of Commerce, Enterprise and Industry for 17 years in various roles culminating with heading the organisation’s Policy Unit for 10 years. André is a management and economic policy expert with experience in policy analysis and development, business advocacy, European affairs, national and international relations. He also has extensive experience in data analysis and survey coordination and specific focus on macroeconomic analysis, environmental matters, human resources, good governance, better regulation and business advisory. During his time with the Malta Chamber of Commerce, André led the Policy team and was the main liaison with European representative bodies, including Business Europe and Eurochambres. He was involved in the drafting and coordination of all key policy documents and key recommendations of the organisation, most importantly the annual national budget recommendations and economic visions for the county. He was also member of various national boards, including MCESD, MEUSAC (now SEM) and Retail Price Index. He’s also been involved in event organisation and had been guest lecturing at the University of Malta since 2013. He also represented the organisation in several television, radio programmes and conferences.
