COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Malta Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Malta
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Malta, budget policy, economic policy, economic recovery, economic reform, education policy, employment policy, renewable energy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 618 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Malta Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Malta {COM(2024) 618 final} - {SWD(2024) 600 final}  
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

the  adjustment 

5.6%  with  energy  prices  being  kept  at  2020 
levels.  Inflation in  2024  and  2025  is  forecast 
at 2.8% and 2.3% respectively, with continuing 
pressures  in  food  and  services  prices,  while 
retail  energy  prices  are  set  to  remain  stable. 
to  cost-of-living 
Despite 
mechanism,  growth  in  nominal  compensation 
per  employee  remained  modest  at  3.1%  in 
2022  and  1.5%  in  2023  and  is  expected  to 
only  gradually  pick  up  to  2.7%  in  2024  and 
3.2% in 2025 on the back of labour shortages 
(notably 
terms, 
compensation  per  employee  decreased  by 
2.2% in 2022 and 3.9% 2023 and its recovery 
is  expected  to  be  weak  amid  low  productivity 
gains.  At  the  same  time,  increases  in  the 
statutory  minimum  wage  helped  to  cushion 
the  negative  impact  of  inflation  on  low-wage 
earners.  Income  inequalities  as  measured  by 
the  income  quintile  share  ratio  decreased  to 
4.79  in  2022  (almost  in  line  with  the  EU 
average of 4.88). 

services). 

real 

In 

in 

The government deficit is set to decrease 
but remains one of the highest in the EU. 
Malta’s  government  deficit  has  decreased  to 
4.9% of GDP in 2023 and is expected to reach 
3.9% 
in  2025.  Government  spending  on 
measures  to  mitigate  the  impact  of  high 
energy prices is the main reason for this high 
deficit,  despite  strong  nominal  GDP  growth 
and  the  phasing  out  of  pandemic  measures. 
The  government  debt-to-GDP  ratio  remains 
below 60%. 

Labour  productivity  growth  slowed  down 
markedly  after  a  fast  recovery  in  2021 
and  2022.  Labour  productivity  growth  (per 
hour worked) was very high in the post-COVID 
period  (9.2%  in  2021  and  4.1%  in  2022)  but 
declined to 1.4% in 2023. It is expected to be 
slightly  negative  in  2024  and  2025.  Both 
public  and  private  investment  in  R&D  remain 
critically low and the share of R&D staff (as a 
percentage  of  total  employment)  was  less 
than half the EU average. 

Economic growth remains solid, 
but labour shortages and low 
education outcomes weigh on 
future growth potential 

Economic  growth  is  expected  to  remain 
robust  (1).  Malta’s  economy  continues  its 
strong  economic  growth  and  is  expected  to 
outperform other Member States also in 2024 
and  2025 .  The  tourism  sector  continues  to 
rebound  strongly,  exceeding  pre-pandemic 
levels  and  having  further  growth  prospects. 
GDP growth is expected to reach 4.6% in 2024 
and  4.3%  in  2025,  driven  by  net  exports  and 
private consumption. 

Graph 1.1: Malta - Real GDP growth and 
contributions 

Source: European Commission, Eurostat 

Compensation per employee in real terms 
declined  strongly  in  2022  and  2023  and 
the  recovery  is  expected  to  be  weak.  In 
2023, 
the 
harmonised index of consumer prices, reached 

inflation,  as  measured  by 

(1)  The cut-off date for the data used to prepare the 27 

Country Reports was 15 May 2024. 

2 

-12-8-4048121616171819202122232425Net exportsInvestmentPriv. consumptionGov. consumptionInventoriesReal GDP (y-o-y%)forecastpps.  
 
  
 
Box 1:  Malta’s competitiveness in brief 

Malta's  economy  is  well  positioned  in  dynamic  service  exports  (online  gaming, 
management  and  financial  services)  and  high  value-added  export  of  goods 
(pharmaceutical  products,  electronics  and  microchips).  Labour  productivity  growth  (per 
hour worked) was high in 2022 (4.1%) but moderated in 2023 (1.4%) and is expected 
to be slightly negative in 2024 and 2025. Competitiveness challenges remain. 

•  Skills  shortages  and  mismatches,  and  low  education  outcomes  limit  potential 
growth, hinder the green and digital transitions and are a bottleneck to investment. 

•  Research  and  innovation  performance  is  modest  as  the  index  for  research  and 
innovation is 85.8% of the EU average, notably due to low investments in this area by 
both  the  public  and  private  sectors.  Academia-business  cooperation  is  insufficient  to 
promote research and innovation. 

•  Malta underperforms in the green/environmental dimension, and this has direct 
consequences  on  the  country’s  competitiveness.  Inadequate  investment  in  sustainable 
energy  and  transport,  exacerbated  by  recent  population  growth,  has  resulted  in 
increased electricity outages and traffic congestion. 

for 

except 

certain 

The  Maltese labour  market  is  performing 
well 
groups. 
Employment  grew  strongly  by  6.0%  in  2022 
in  2023  delivering  a  high 
and  6.5% 
employment rate of 82.5% in Q4-2023 (vs EU 
75.5%).  Therefore,  the  country  is  progressing 
very well towards its 2030 employment target 
of  84.6%.  However,  the  gender  employment 
gap remains wide, and the gender pension gap 
is  one  of  the  widest  in  the  EU.  Persons  with 
disabilities endure an employment gap that is 
8.7 pps  above  the  EU  average  at  30.1 pps. 
Both  third  country  nationals  (TCNs)  and  EU 
nationals  are  much  less  likely  than  Maltese 
citizens to remain with the same employer for 
more  than  a  year.  Data  suggests  that  about 
70% of termination forms submitted for TCNs 
are  for  persons  who  have  been  employed  for 
less  than  12  months (2).  TCNs  often  face 
challenging working conditions and difficulties 
in accessing accommodation. 

Insufficient  educational  outcomes  and 
low  participation  in  learning  of  low-
skilled  adults  risk  increasing  labour  and 
skills  shortages. 
labour 
shortages  were  reported  as  a  factor  limiting 
production  in  Malta  around  twice  as  often  as 
the EU average in services and industry, while 

In  Q1-2024, 

(2)  Source: Central Bank of Malta (2023), Labour-turnover-

Malta.pdf (centralbankmalta.org) 

3 

to 

broadly in line with it in construction. The rate 
of early school-leavers is on a downward trend 
but still remains slightly above the EU average. 
the  OECD  Programme  for 
According 
International Student Assessment (PISA), Malta 
has  one  of  the  highest  underachievement 
rates  in  all  three  fields  tested  in  the  EU.  The 
share  of  adults  (aged  25-64)  participating  in 
education and training (in the last 12 months) 
is in line with the EU average, but participation 
of  the  low-skilled  is  lower.  Efforts  should 
continue  to  reach  the  adult  learning  target  of 
57.6% set for 2030. 

Other challenges remain 

Malta faces difficulties to balance strong 
economic  growth  with  environmental 
sustainability.  The  green  transition  is  held 
back  by  the  dominance  of  fossil  fuels. 
Renewables  generate  only  13.4%  of  Malta’s 
energy,  one  of  the  lowest  shares  in  the  EU, 
and energy efficiency gains have slowed down, 
despite  a  significant  potential  for  energy 
savings.  Wider  use  of  sustainable  business 
models  and  materials,  would  increase  the 
sustainability,  quality,  safety  and  energy 
efficiency  of  construction,  as  would  effective 
implementation  of  the  recommendations  of 
the public inquiry into construction safety. New 

 
 
 
Box 2: 

UN Sustainable Development Goals (SDGs) 

Malta performs well (SDG 8) or is improving (SDGs 4 and 9) on SDGs related to 
productivity.  However,  it  still  needs  to  step  up  efforts  to  close  the  gap  with 
the  EU  average  on  both  quality  education  (SDG  4),  and  industry,  innovation 
and infrastructure (SDG 9). Malta maintains a high employment rate, low long-term 
unemployment  and  a  low  and  further  declining  number  of  young  people  not  in 
education,  employment  or  training  (NEETs).  However,  the  Maltese  research  and 
innovation  system  suffers  from  underinvestment  and  a  very  low  share  of  R&D 
personnel.  Furthermore,  although  it  is  improving,  also  through  the  government's 
commitments  as  part  of  Malta's  Smart  Specialisation  Strategy  2021-2027,  Malta 
performs  below  the  EU  average  regarding  SDG  4,  hampering  economic  growth  and 
competitiveness.  Decreasing  education  outcomes  coupled  with  low  participation  of 
children over 3 years old in early childhood education, and a still significant number of 
early school-leavers, risk further exacerbating prevalent skills shortages. 

•  Out of the 17 indicators, 8 SDGs remain below the EU average. Besides 
SDG 4 and SDG 9 highlighted above, these relate to fairness (SDGs 2, 3, 5) and 
environmental stability (SDGs 11, 12, 13) (see Annex 1). 

measures  to  reduce  traffic  congestion  and 
high emissions  from transport  are  needed  for 
sustainable  and  people-centric 
a  more 
economy. Sustainable water management and 
wastewater  treatment  is  a  concern  for  the 
water-scarce  country.  Malta’s  rapid  economic 
threaten 
development 
biodiversity  and  generate  significant  waste, 
exacerbated by low recycling rates. 

urbanisation 

and 

Malta  faces  fiscal  sustainability  risks  in 
the long term. Ageing costs are projected to 
rise by 8.6% of GDP between 2022 and 2070, 
due to an expected increase in expenditure on 
pensions,  healthcare,  and  long-term  care.  Tax 
revenues  remain  highly  reliant  on  corporate 
taxes,  making  the  country  more  vulnerable  to 
future  economic  shocks.  Malta’s  tax  system 
can  give  rise  to  aggressive  tax-planning 
practices.  The  country’s  commitments  to  curb 
these practices are a step in the right direction 
(see Sections 2 and 3). 

Access  to  non-bank  finance  remains 
limited  for  non-financial  corporations. 
Even  though  new  bond  issuances  by  non-
financial  corporations  as a  share  of  GDP  rose 
slightly  to  1.2%  in  2022,  the  value  of  annual 
initial  public  offerings  as  a  share  of  GDP 
plummeted to 0.3% Private equity investment 
levels are well below the EU average. 

4 

While steps are being taken to reduce the 
duration  of  court  proceedings,  these  are 
still  very  lengthy.  Administrative  cases  at 
first  instance  in  Malta  are  estimated  to  take 
the longest time to be resolved in the EU. The 
clearance  rate  for  non-criminal  cases  has 
deteriorated  and  is  particularly  concerning  for 
civil  and  commercial  cases.  The 
lack  of 
resources  and  prevalence  of  outdated  work 
practices are among the causes of delays. 

Malta  performs 
relatively  well  on 
implementing  the  European  Pillar  of 
Social  Rights,  but  challenges  remain  (see 
Annex  14).  The  early  school-leaving  rate  is 
declining  while  remaining  slightly  above  the 
EU  average.  The  gender  and  disability 
employment gaps remain among the widest in 
the EU. Only half of the people of working age 
with  disabilities  are  active  in  the  labour 
market.  The  impact  of  social  transfers  on 
reducing  poverty  is  low  at  26.4%  (EU  35%). 
Consequently, the country should persist in its 
endeavours  to  attain  its  2030  poverty  and 
social  exclusion  target.  Free  childcare 
is 
in  employment  or 
available 
education. In 2022, the share of children aged 
less than 3 years in formal childcare increased 
to  43.1%,  which  is  in  stark  contrast  to  the 
declining  participation  rate  of  children  above 
the age of three (see Section 3). 

to  parents 

 
 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

Funding from the Recovery and Resilience 
Facility  (RRF)  and  cohesion  policy  is 
mutually  reinforcing  Malta’s  efforts  to 
boost 
its  competitiveness  and  foster 
In  addition  to  the 
sustainable  growth. 
EUR 328.2 million of RRF funding described in 
Annex  3,  cohesion  policy  funding  provides 
Malta  with  EUR 772.8  million for  the  2021-
two 
2027  period.  Support 
instruments  combined  represents  close  to 
5.68%  of 
in  2023, 
the  country’s  GDP 
compared  to  an  EU  average  of  5.38%  (see 
Annex 4). 

these 

from 

launched 

Under  its  recovery  and  resilience  plan 
important 
(RRP),  Malta  has 
policy  measures  that  are  expected  to 
improve the country’s competitiveness. In 
particular, the RRP envisages major reforms in 
law, 
the  areas  of  taxation  and  rule  of 
healthcare, transport, and waste management. 
Malta  also  undertook  substantial  investments 
in  a  number  of  areas:  energy  renovation  of 
buildings; 
public 
strengthening and widening the electricity grid; 
building  battery  storage  capacity;  zero-
emission 
and 
modernisation of healthcare. 

digitalisation; 

transport; 

private 

sector 

and 

the  2014-2020 

Cohesion  policy  funding  helps  tackle 
Malta’s  growth  and  competitiveness 
challenges  and  reduce  the  country’s 
territorial and social cohesion disparities. 
Under 
cohesion  policy 
programming  period,  support  focused  on  the 
areas  of  research  and 
innovation,  water 
supply,  energy  efficiency,  job  maintenance  in 
the context of COVID-19, early school-leaving, 
and  social  inclusion.  For  the  current  2021-
2027 programming period, support is aimed at 
further promoting Malta’s competitiveness, the 
green  and  digital  transitions,  social  cohesion, 
skills  development,  and  improving  the  living 
and working conditions of Malta’s people.  

two  payment 

The  implementation  of  Malta’s  recovery 
and  resilience  plan  is  well  underway. 
Malta  submitted 
requests, 
corresponding to 53 milestones and targets in 
in  an  overall 
resulting 
the  plan  and 
disbursement of EUR 166.4 million by 16 May 
2024.  Beyond  the  two  payment  requests,  the 
implementation  of  the  plan  is  on  track  (see 
Annex 3). 

Unlocking investments for the 
green transition 

Fund 

(ERDF) 

Malta  has  taken  steps  to  improve  the 
energy  efficiency  and  productivity  of  its 
building  stock  and  to  electrify  transport. 
Within  the  RRP,  Malta  has  begun  to  provide 
grants to improve energy efficiency and lower 
carbon  emissions  through  the  retrofitting  of 
public  and  private  sector  buildings.  At  the 
same  time,  investment  through  the  European 
Regional  Development 
is 
supporting  marketable  projects  by  SMEs  and 
households,  prioritising  the  worst-performing 
buildings  and  multi-housing  blocks.  Measures 
under  the  RRP  also  include  the  electrification 
of  road  transport,  private  and  public,  and  the 
introduction  of  free  public  transport,  financed 
by  national  funds,  in  a  bid  to  reduce  traffic 
congestion.  Many  challenges  remain,  yet  by 
leveraging  RRF  and  ERDF  funds,  Malta  is 
smartly  reducing  carbon emissions,  enhancing 
productivity,  and  boosting  private  investment, 
all  contributing  to  elevating  the  country’s 
competitiveness. 

The  RRF  and  cohesion  policy  funds  are 
helping to modernise waste management 
in  Malta.  The  Cohesion  Fund  investment  in 
the  construction  of  the  Organic  Processing 
Plant  targets  separately  collected  organic 
waste. The investment enables the recovery of 
energy by capturing the by-products of organic 

5 

 
 
waste  treatment  and  it  creates  conditions  for 
the  reduction  of  landfilling  of  organic  waste. 
The  RRP  is  complementing  this  investment 
with  a  reform  to  reorganise  waste  collection 
Islands.  Waste  collection 
on  the  Maltese 
services,  including  of  recyclables,  have  been 
consolidated  in  six  regional  bodies  across 
Malta  and  Gozo 
previous 
fragmented framework spread across 68 local 
councils).  The  combined 
investment  and 
reform  have  resulted  in  increased  economies 
of  scale  and  more  efficient  waste  collection 
systems. 

(from 

the 

Investing in people for economic 
growth and social resilience 

tools  for 

improved  human 

Malta is implementing policy reforms and 
investments  under  both  the  RRP  and  the 
European  Social  Fund  Plus  (ESF+)  to 
improve the healthcare sector. Apart from 
direct investment in the new Blood, Tissue and 
Cell  Centre  or  diagnostic  equipment,  in  the 
RRP,  Malta  committed  to  the  implementation 
resources 
of 
management  in  healthcare  and  measures  to 
improve  the  well-being  of  foreign  health 
workers.  The  ESF+  Programme  supports 
training  for  health  professionals,  including  in 
long-term care. These reforms should improve 
productivity and help to shift the treatment of 
chronic  diseases  from  cost-intensive  care  in 
hospitals to primary care and community-care 
settings,  thereby 
long-term 
fiscal sustainability of the sector. 

improving  the 

Given  the  specific  difficulties  to  recruit 
workers  in  Malta,  the  RRP  helps  to  align 
job  offers  with  labour  market  needs. 
Under its RRP, Malta has launched an e-college 
platform;  this  is  to  expand  guidance  and 
opportunities on upskilling and reskilling for all 
adults,  and  in  particular  for  the  low-skilled. 
first  500 
skills, 
Regarding  green 
professionals  have  been  trained  and  certified 
for  the  green  transition  in  the  construction 
sector.  Furthermore,  Malta  has  started  to 
provide  scholarships  to  master's  and  PhD 
students  in  innovative  technologies,  such  as 
intelligence.  Complementarily,  the 
artificial 

the 

6 

biggest share of Malta’s ESF+ budget (43%) is 
dedicated  to  quality  and  inclusive  education 
and training. 

By  making  effective  use  of  various 
funding  sources,  Malta 
is  supporting 
people with disabilities. As part of the RRP, 
Malta  has  rolled  out  multi-sensory  learning 
rooms  for  students  with  severe  needs  in 
colleges  and  autism  units  in  middle  schools, 
thus  supporting  the  further  integration  of 
pupils with special needs into the mainstream 
school  environment.  Malta’s  ESF+  Operational 
Programme 
includes  targeted  support  for 
people  with  disabilities  once  they  leave  the 
education system. Measures cover generic and 
specific  training  services  to  achieve  skills 
relevant  for  work  (including  ICT  skills)  and 
independent  living,  and  for  work  exposure 
support, apprenticeships and job coaching, and 
guidance and mentoring services. 

Strengthening the digital capacity 
and the institutional framework 

Malta  undertook  major  steps  to  improve 
fairness  in  taxation  and  to  fight  money 
laundering  and  financial  crime.  As  part  of 
the RRP, Malta adopted a new law introducing 
transfer  pricing  rules  as  of  January  2024, 
aiming  to  prevent  opportunities  of  corporate 
profit shifting. The rules will also help to level 
the  playing  field  between  local  and  foreign 
businesses.  Malta  has  abolished  the  tax 
exemption for dividends from non-cooperative 
jurisdictions  and  it  introduced  spontaneous 
exchange of information on new applicants for 
the 
scheme. 
Simultaneously, in 2023, the Technical Support 
Instrument  supported  Malta  in  reinforcing  tax 
compliance through real-time reporting, and in 
enhancing 
tax 
information  exchanged  between  Member 
States  in  the  context  of  the  Directive  on 
administrative  cooperation.  Challenges  remain 
(see  Section  3),  yet  these  reforms  collectively 
contribute to creating a more transparent and 
compliant business environment. In tandem, as 
part  of  a  comprehensive  agenda  to  fight 
invested  in 
money 
its 
for 
numerous 

the  quality  and  use  of 

laundering,  Malta  has 

training  programmes 

citizenship 

country’s 

 
Box 3:  Combined action for more impactful EU funds 

To  boost  economic  growth  and  maximise  the  impact  of  EU  funding,  Malta’s  RRP  includes 
reforms that support investments under other EU instruments, creating important synergies 
and  complementarities  between  the  various  funds.  For  example,  to  reduce  waste  and 
stimulate  reuse  and  recycling,  Malta’s  RRP  includes  reforms  to  shift  waste  collection  to 
regions,  including  the  collection  of  recyclables.  This  is  complemented  by  investments 
financed under the ERDF to enable the recovery  of energy by capturing the by-products of 
organic waste treatment and to create conditions for the reduction of landfilling of organic 
waste.  Additional  reforms  under  Malta’s  RRP  relate  to  the  adoption  of  new  construction 
standards,  combined  with training  and  certifying  professionals  in  the  construction  industry. 
These reforms are creating a supportive broader domestic investment framework, including 
for energy renovation projects financed by combined resources from the RRP and ERDF, all 
aiming  to  reduce  carbon  emissions,  and  to  enhance  productivity  and  economic 
competitiveness. 

in 

trust 

system 

justice 
the 
increases 
independence and efficiency of the institutions 
and  is  a  prerequisite  for  investment  and 
competitiveness 
in  any  economy.  Several 
reforms have been implemented to strengthen 
the independence of the institutions, including 
reforms  in  the  method  of  appointing  the 
judiciary,  the  Commissioner  of  Police,  and 
Malta’s  main  anti-corruption  body.  Following 
the creation of a separate prosecution service 
in  2019,  Malta’s  RRP  enables  the  transfer  of 
prosecution  cases  from  the  police  through 
legislative  amendments  and  the  staffing  of 
the  Attorney  General’s  office.  In  2023,  the 
Technical Support Instrument supported Malta 
in  implementing  the  business  reorganisation 
action  plan  of  the  office  of  the  Attorney 
General  and the  office  of the  State  Advocate. 
It  was  also  instrumental  in  assisting  Malta  to 
draft  a  national  digital  justice  strategy  for 
2022-2027.  Most  of  the  actions  included  in 
this  strategy  are  being  implemented  through 
investment  under  Malta’s  RRP.  This 
an 
investment  also 
complementarities 
sees 
between  the  RRF,  the  Asylum,  Migration  and 
Integration  Fund  2014-2020,  and  the  ESF+ 
2021-2027.  This  enables  the  integration  of 
third-country  nationals  into  Maltese  society, 
including 
ICT 
hardware  and  software  to  migrants  facing 
economic hardship. 

the  provision  of 

through 

administration  throughout  2021  and  2024, 
with  a  focused  approach  on  anti-money 
laundering and counterterrorism financing. 

security  and 

The  RRF  and  cohesion  policy  funds 
complement each other in supporting the 
digitalisation  of  Malta's  public  and 
private sectors. As part of its RRP, Malta has 
begun its investment in the government’s core 
digital infrastructure (backbone) to improve its 
resilience,  capacity  and  security.  It  is  also 
investing  in  improving  digital  public  services. 
The  ERDF  contributes  to  the  digitalisation  of 
the 
public  administration  by  supporting 
transition to a paperless environment. This will 
offer  several  benefits,  including  additional 
layers  of 
the 
interactions  of  citizens  and  businesses  with 
the  government.  With  respect  to  the  private 
sector,  Malta  has 
three  grant 
schemes  funded  under  the  RRF  to  support 
business  investment  in  digitalisation,  notably 
by  SMEs.  The  ERDF  further  assists  companies 
through  non-repayable  grants  to  invest  in 
digitalisation, including in digital infrastructure 
and equipment, software and licences, and the 
development  of  plans  for  the  digitalisation  of 
products,  services  and  processes.  Advancing 
the  digitalisation  of  both  the  public  and  the 
private  sector  in  Malta  is  key  to  fostering 
innovation and competitiveness. 

improving 

launched 

to 
Malta  has  undertaken  measures 
strengthen  the  justice  system,  including 
through  digitalisation.  A  well-functioning 

7 

 
 
FURTHER PRIORITIES AHEAD 

of 

the 

green 

research 

transition, 

disadvantaged 
and 

Malta faces additional challenges related 
fiscal 
to 
sustainability  and  taxation,  shortages  of 
skilled  workers  and 
low  education 
outcomes,  the  labour  market  and  social 
groups, 
inclusion 
modest 
development 
intensity, and the efficiency of the justice 
system.  Tackling  these  challenges  will  help 
boost  Malta’s  long-term  competitiveness  and 
ensure  the  resilience  of  its  economy.  It  will 
also  help  Malta  to  make  further  progress  in 
achieving  the  UN  Sustainable  Development 
Goals (SDGs). It is important that the identified 
challenges are addressed at both national and 
regional  level  to  reduce  disparities  between 
Malta and Gozo, to ensure a cohesive territory 
on  the  island  of  Malta,  and  to  improve  the 
administrative  and  absorption  capacity  in  a 
balanced way across the islands. 

compared 

Energy  efficiency  gains  have  slowed 
down,  despite  a  significant  potential  for 
energy  savings  in  buildings.  Malta’s  final 
energy  consumption  in  2022  increased  by 
19.3% 
to  2021.  Buildings, 
accounting  for  almost  half  of  Malta’s  total 
energy demand (see Graph 3.1), contributed to 
the  increased  energy  consumption.  Energy 
emergency support measures are still in force 
and weaken the price signal for saving energy. 
More  precise  targeting,  and  setting  a  time 
frame  for  their  phase-out,  would  improve  the 
effectiveness  and  fiscal  sustainability  of 
subsidies (the fiscal cost of these measures is 
estimated  at  2%  of  GDP  in  2024  and  1%  in 
2025). Safety and quality concerns continue to 
industry.  Robust 
afflict 
implementation  of 
recommendations  put 
forward  by  the  recent  public  inquiry  would 
increase 
the  quality,  safety  and  energy 
efficiency of construction. 

the  construction 

Promoting the green transition 

Graph 3.1: Energy demand by sector in Malta, 
2022 

Malta’s green transition is stymied by the 
dominance  of  fossil  fuels  in  its  economy 
(see Annexes 6, 7 and 8). Although increasing 
in  share,  renewables  generate  only  13.4%  of 
Malta’s energy, one of the lowest shares in the 
EU,  well  below  the  indicative  2030  target  of 
28%.  While  installed  solar  energy  capacity 
from photovoltaics is slowly increasing (by 4% 
in  2023) (3),  the  ongoing  reform  under  the 
recovery  and  resilience  plan  (RRP)  mandating 
solar  energy  installations  on  certain  new 
buildings  should  considerably  increase  their 
roll-out.  A  preliminary market  consultation  for 
a floating solar farm was launched in February 
2024.   

(3)  IRENA report (2023). 

Source: Eurostat 

There 
is  a  need  to  reduce  traffic 
congestion and high emissions from road 
transport.  Greenhouse  gas  emissions  from 
increased  by  23.3% 
road  transport  have 
compared  to  2005  levels  (see  Annex  6).  The 
ban on rentals of e-scooters from March 2024 
reduced  the  options  of  alternative  mobility. 
There  has  been  an  increase  of  more  than  a 
third  in  public  transport  users  since  the  bus 
service was made free in late 2022. However, 

8 

Industry 12%Transport43%Buildings41%Other4% 
 
 
   
passenger  cars  still  account  for  86%  of 
passenger  transport  in  Malta.  This  trend  also 
reflects  the  fact  that  there  are 
limited 
disincentives  to  private  car  use.  Preference 
should be  given to  quality  of  public transport, 
improved 
maritime 
pedestrian  walkways,  bus 
lanes,  and  the 
development of multimodal roads. 

transport, 

freight 

Adoption  of  electric  vehicles  should  be 
accelerated. 
In  2022,  electric  vehicles 
constituted merely 0.8% of the passenger car 
fleet.  Financial  incentives  for  the  purchase  of 
such vehicles are a step in the right direction. 
However,  in  2023,  only  one  government-
owned  publicly  accessible  charging  point  for 
every  33  electric  vehicles  was  offered  (EU:  1 
for  every  10  vehicles).  ERDF  funding  is  being 
utilised to accelerate the installation of public 
charging  points,  to  incentivise  their  purchase, 
in line with Malta’s climate ambition. 

Sustainable  water  management 
is  a 
concern  for  the  water-scarce  country, 
especially  in  light  of  rising  demand  (see 
Annex  6).  Only  37%  of  Malta’s  surface  water 
bodies  are  in  a  good  ecological  status  and 
53%  in  a  good  chemical  status.  Groundwater 
in  Malta  is  under  strain  from  municipal  water 
supply,  agriculture,  tourism,  and  population 
growth.  Excessive  abstraction  of  groundwater 
is  causing  its  salinisation.  Moreover,  Malta 
remains 
increasingly  vulnerable  to  severe 
storms, flash urban floods and heatwaves. 

it 

Malta  generates  a  very  large  amount  of 
municipal  waste  and  most  of 
is 
landfilled.  Municipal  waste  generation  stood 
at  618 kg  per  capita  in  2022,  among  the 
highest  in  the  EU.  The  recycling  rate  for 
municipal waste was only 13.6% in 2021, far 
below both the EU average of 48.6% and the 
2020 target of 50%. 

of 

biodiversity  and 

Malta continues to face challenges in the 
areas 
nature 
protection.  At  the  end  of  2021,  29%  of 
Malta’s land area and 5.5% of its marine area 
was  under  protection.  The  illegal  practices  of 
migratory  bird  hunting  and  trapping  create 
further problems for wildlife. 

Addressing fiscal sustainability 
and taxation challenges 

to 

risks 

long-term 

The  projected  future  growth  in  health, 
long-term  care  and  pension  expenditure 
poses 
fiscal 
sustainability (4).  Age-related  government 
spending  is  expected  to  increase  significantly. 
In  2022,  public  pension  expenditure  (currently 
at 6.2% of GDP, among the lowest in the EU), 
is  projected  to  increase  to  10.5%  of  GDP  by 
2070,  one  of  the  highest  projected  increases 
in 
the  EU.  Government  expenditure  on 
healthcare,  relatively  low  at  5.1%  of  GDP  in 
2022, is projected to surge to 7.2% of GDP by 
2070,  close  to  the  projections  for  the  EU 
average 
(7.3%).  Government  spending  on 
long-term  care  is  also  expected  to  increase 
from 1.2% of GDP in 2022 to 3.4% by 2070. 
Home care has a share of only 8% (compared 
to 29% at EU level). 

institution. 

Efforts  could  be  made  to  strengthen  the 
independent  fiscal  institution.  The  Malta 
Fiscal Advisory Council is a small independent 
and 
fiscal 
sustainability analysis is not explicitly included 
in  the  mandate  of  the  Malta  Fiscal  Advisory 
Council,  but  it  is  free  to  carry  out  such  tasks. 
Since 2015, its budget has been frozen in real 
terms by law. 

costing 

Policy 

Malta’s  tax  system  has  potential  for 
including 
improvements, 
efficiency 
regarding  collection.  In  2022,  tax  revenue 
stood  at  29%  of  GDP  (compared  to  the  EU’s 
40.2%), as labour taxes remain lower than the 
EU average. The system remains highly reliant 
on  corporate 
it 
vulnerable  to  economic  downturns.  Malta’s 
property tax revenues accounted for only 0.8% 
of  GDP  in  2021,  substantially  lower  than  the 
EU average of 2.2%, and there is no recurrent 
tax  on  property.  Despite  levying  one  of  the 
lowest  standard  VAT  rates  in  the  EU,  in  2021 
Malta  had  the  second-highest  VAT  gap  in  the 

taxes,  making 

income 

(4)  See Annex 21. The debt-sustainability analysis shows 
that risks to the sustainability of Malta’s government 
finances are high in the long term. 

9 

 
 
EU at 25.7% (the gap between the theoretical 
tax liability and revenues actually collected), a 
level  that  is  over  five  times  higher  than  the 
median. 

Graph 3.2: Share of net inward and outward 
foreign direct investment (FDI) stock held by 
entities with no or little presence in Malta 
(Special Purpose Entity) 

Directive (5),  which  applies  only  to 
corporations. 

large 

its 

The 

investor 

citizenship 

cooperation. 

Malta’s 
scheme 
continues  to  raise  serious  concerns  in 
light of EU citizenship and the principle of 
sincere 
European 
that  Malta  should 
Commission  considers 
(‘golden 
citizenship 
investor 
repeal 
passport’)  scheme  and  in  September  2022, 
decided to  refer  Malta  to the Court  of  Justice 
of the European Union. The referral took place 
in  March  2023  and  the  procedure  is  still 
ongoing. Such a scheme also presents inherent 
risks regarding security, money laundering, tax 
evasion, and corruption (6). 

(1)  Net  stock  data  have  been  used  because  data  on 
assets  and 
for  Malta. 
liabilities  are  unavailable 
(2)  2020  data  on  net  outward  FDI  are  unavailable  for 
Malta. 
Source: European Commission 

Ensuring equal opportunities and 
competitiveness through quality 
education and training 

suggest 

indicators 

Certain 
that 
companies  are  using  Malta’s  tax  system 
for  aggressive  tax  planning.  These  include 
the  persistently  high  level  of  foreign  direct 
investments  held  by  legal  entities  that  have 
little or no employment, operations or physical 
presence  in  Malta  and  which  have  increased 
much faster since 2019 than in the EU (Graph 
3.2),  and  the  large  payments  of  royalties, 
interest and dividends. 

in 

its  RRP 

Malta  has  taken  important  steps  to  curb 
aggressive  tax  planning  practices,  but 
more  is  needed  to  close  loopholes.  Malta 
has  implemented  international  and  European 
agreed  initiatives  and  is  also  tackling  the 
(see  Section  2). 
challenge 
Importantly,  Malta  committed  to  introduce 
new  legislation  to  address  risks  of  aggressive 
tax  planning  stemming  from  inbound  and 
outbound  payments.  However,  until  Malta 
enacts  and  enforces  the  new 
legislation 
imposing  withholding  taxes  (or  equivalent 
defensive  measures)  on  payments  to  low-tax 
or zero-tax jurisdictions, there is a risk of these 
payments leaving the EU without being taxed. 
Furthermore,  Malta's  treatment  of  resident 
non-domiciled companies continues to provide 
multinational  firms  with  opportunities  for 
double  non-taxation.  These  issues  are  only 
partly  addressed  by  the  EU’s  Minimum  Tax 

and 

skills 

shortages 

Labour 
and 
mismatches are a pervasive bottleneck to 
competitiveness and the twin transitions. 
More  than  half  of  all  businesses  in  Malta 
consider that their growth was being held back 
by  skills  shortages  (62%) (7).  In  Q1-2024, 
labour  shortages  were  reported  as  a  factor 
limiting  production  in  Malta  around  twice  as 
often  as  the  EU  average  in  services  (52.2% 
compared  to  26.8%),  and  industry  (46.3% 
compared  to  22.8%).  Furthermore,  69%  of 
enterprises  report  hard-to-fill  vacancies  for 
jobs requiring ICT specialist skills (EU 63%; see 
Annex  10).  Skills  mismatches 
remain  a 
pressing  challenge  in  Malta,  both  in  terms  of 
levels  and  fields  of  skills.  Labour  and  skills 

(5)  Council Directive (EU) 2022/2523 of 14 December 

2022, Available at: 
http://data.europa.eu/eli/dir/2022/2523/oj 

(6)  European Commission (2019): 

https://commission.europa.eu/document/download/8606
453f-7ee7-432b-b49d-
f4b9feebee97_en?filename=com_2019_12_final_repo
rt.pdf 

(7)  Eurobarometer on the European Year of Skills, 2023. 

10 

01002003004005006007002013201420152016201720182019202020212022EU-27, Net FDI inward, index (EU-2013)EU-27, Net FDI outward, index (EU-2013)Malta, Net FDI inward, index (MT-2013)Malta, Net FDI outward, index (MT-2013) 
  
 
shortages  may  also  create  bottlenecks  in  the 
transition to a net-zero economy (8).  

of 

and 

adults 

(25-64 

school-leaving 

Early 
low 
participation  in  learning  among  the  low-
skilled  risks  further 
increasing  skills 
shortages. The rate of early school-leavers is 
on  a  downward  trend  (-8.1 pps  since  2012) 
but  remains  slightly  above  the  EU  average  in 
2023  (10.0%  vs  EU  9.5%),  increasing  the 
already large pool of low-skilled adults (15-64 
age  group;  33.1%  vs  EU  24.9%).  Despite  the 
group) 
share 
participating  in  education  and  training  in  the 
last  12  months  being  in  line  with  the  EU 
average,  significant  differences  exist  among 
levels  of  education.  Among  low-skilled  adults 
(25-64),  the  same  share  was  only  16.3%, 
against 37.6% among the medium-skilled, and 
tertiary 
65.9%  among 
education (9).  Although  63%  of  adults  had  at 
least  basic  digital  skills  in  2023  (EU:  55.5%), 
the  differences  by  skills  levels  are  significant. 
Enhancing  education  outcomes  and  skills, 
notably  for  the  low-skilled,  can  help  increase 
productivity and wages. 

those  with  a 

age 

The  lack  of  basic  skills  among  young 
people  represents  a  risk  for  skills 
development  and  competitiveness.  The 
latest  results  of  the  OECD  Programme  for 
International  Student  Assessment  (PISA) (10) 
show 
that  32.6%  of  Maltese  students 
underperformed  in  mathematics,  36.3%  in 
reading,  and  30.3%  in  science.  These  are 
among the highest shares of low achievement 
in  the  EU  (see  Graph  3.3).  The  rate  has  not 
changed  in  mathematics  and  reading  since 
2015 (11).  In  science,  the  share  has  fallen  by 
2.2 pps since then, but it is still 6.1 pps higher 
than the EU average (30.3% vs 24.2%). These 
negative results are in line with those recorded 
by the 2021 Progress in International Reading 

(8)  European Labour Authority 2024, EURES Report on 

labour shortages and surpluses 2023. 

(9)  Adult Education Survey, adults in learning in the past 12 
months, special extraction excl. guided on-the-job 
training 

(10)  OECD (2023), PISA 2022 Results (Volume I): The State 

of Learning and Equity in Education. 

Literacy  Study.  The  Maltese  rate  of  low-
achieving  fourth  graders 
in  reading  was 
among  the  highest  of  the  participating  EU 
education  systems 
(30%  vs  23%  EU-19 
level) (12).  Factors that may contribute to poor 
performance 
of 
absenteeism,  and  challenges  linked  to  the 
teaching  profession  that  have  an  impact  on 
the quality of teaching (see Annex 15). 

include  a  high 

rate 

Underachievement  is  widespread  and  the 
socio-economic  gap  has  not  improved 
since  2015.  In  2022,  around  47.7%  of 
students  from  the  bottom  socio-economic 
quartile lacked basic skills in mathematics (EU 
47.5%)  and  the  rate  for  the  top  quartile  was 
also high (17.2% vs EU 11%). This shows that 
underachievement  does  not  only  concern 
disadvantaged 
are 
students. 
significantly  better  for  students  attending 
to 
independent 
fragmentation in the school system (see Annex 
15). 

pointing 

schools, 

Results 

Graph 3.3: Underachievement rates by field, 
PISA 2015, 2018 and 2022 

Source: OECD (2023) 

Participation in early childhood education 
and care by children above the age of 3 is 
continuing  to  fall.  The  rate  stood  at  86.2% 
in  2021,  compared  with  an  EU  average  of 
92.5%,  and  has  further  decreased  by  2.9 pps 
since  2020.  At  the  same  time,  despite 
significant improvements over the last decade, 
the  gender  employment  gap  remains  wide 
(14.2 pps  in  2023  vs  EU  10.2 pps),  while  the 
gender pension gap is one of the widest in the 

(12)  European Commission, (2023). Education and Training 

(11)  Malta did not participate in PISA 2012. 

Monitor – Malta. 

11 

0510152025303540MTEUMTEUMTEUMathematicsReadingScience%2015201820222030 EU target 
 
  
 
EU (45 pps vs EU 26.1 pps in 2022; age group 
65-79) (see Annex 14). 

(30.6%), 

Poverty indicators in Malta are below the 
EU average in general but remain high for 
specific groups. The share of Maltese people 
at  risk  of  poverty  or  social  exclusion  stood  at 
20.1% in 2022, slightly below the EU average. 
However, this rate remained high among non-
EU  nationals 
low-skilled  adults 
(30.9%),  people  aged  over  65  (33.3%),  in 
particular  older  women,  and  persons  with 
disabilities (36%). The latter is also linked with 
a  high  and  rising  disability  employment  gap, 
which,  at  30.1 pps,  is  far  above  the  EU 
average  (21.4 pps).  Third-country  nationals 
often face challenging working conditions, are 
more likely to be victims of abusive behaviour 
from  employers  and  agencies,  and  face 
difficulties 
in  accessing  accommodation. 
Although the share of children in Malta at risk 
of  poverty  or  social  exclusion  remains  below 
the  EU  average,  children  of  single  parents  or 
children with low-skilled parents face a greater 
risk.  The  poverty-reducing  impact  of  social 
transfers 
(excluding  pensions)  remains  at 
26.4% (vs EU 35.0%), one of the lowest in the 
EU (see Annex 14). 

Increasing research and innovation 
to support productivity and 
competitiveness 

The  potential  of  research  and  innovation 
(R&I)  for  boosting  productivity  and 
competitiveness  remains  underutilised. 
Malta  continues  to  be  a  ‘moderate  innovator’, 
according  to  the  2023  European  Innovation 
Scoreboard.  Its  performance  stands  at  85.8% 
of  the  EU  average,  although  the  country’s 
performance  gap  with  the  EU  has  become 
smaller.  The  effective  implementation  of  the 
actions  set  out  in  the  recently  adopted  smart 
specialisation strategy for 2021-2027 and the 
national research and innovation strategic plan 
for  2023-2027  is  key  to  improving  the  R&I 
ecosystem and performance in Malta. 

Malta  suffers  from  underinvestment  in 
in  both  the  public  and  private 
R&I 

12 

sectors.  Total  R&D  intensity  is  significantly 
lower  than  the  EU  average  (0.69%  vs  2.24% 
of  GDP)  (see  Annex  11).  Public  investment  in 
R&D  has  been  stagnant  since  2010  and 
remains well below the EU average. Despite a 
progressive  increase,  private  expenditure  in 
R&D  is  very  low  compared  to  other  Member 
States.  

The  lack  of  human  capital  weighs  on  the 
innovation capacity. The shortage in human 
resources  specifically  for  R&I  is  a  major 
concern.  The  number  of  new  graduates  in 
science  and  engineering  is  critically  low  and 
continues  to  decline.  Also,  the  number  of 
researchers  employed  in  both  the  public  and 
the private sector is very low. 

the 

Capital  markets  and  private  capital 
relatively 
remain 
investment 
underdeveloped, 
options 
limiting 
available  to  non-financial  corporations  for 
financing.  There  may  be  scope  to  strengthen 
investors’ trust in stock market listings, and to 
raise  the  overall  attractiveness  of  market 
financing,  by  promoting  high  standards  of 
corporate 
disclosure. 
Moreover,  further  efforts  can  be  made  to 
facilitate initial public offerings, and to reduce 
costs for issuers and investors. The promotion 
of  financial  literacy  is  also  key  to  fostering 
retail investment. 

governance 

and 

Improving the efficiency and 
quality of the justice system 

to 

time 

needed 

While  Malta  has  registered  improvement 
in the length of judicial proceedings, this 
remains among the longest in the EU. The 
estimated 
resolve 
administrative  cases  at  first  instance  has 
decreased  from  1 356  to  1 081  days  but 
remains  the  longest  in  the  EU.  In  2022, 
improvements  were  also  registered  in  the 
litigious  civil  and 
average  duration  of 
commercial  cases  at  first  instance,  down  to 
491 days from 529 in 2021, though it remains 
relatively  long.  The  clearance  rate  for  civil, 
commercial 
cases 
worsened from 89% in 2021 to 87% in 2022 
(see  Annex  13).  This  led  to  the  Commission 

administrative 

and 

 
Box 4: 

The mid-term review of cohesion policy funds for Malta 

The  mid-term  review  of  cohesion  policy  funds  is  an  opportunity  to  assess  cohesion  policy 
programmes  and  tackle  emerging  needs  and  challenges  in  EU  Member  States  and  their 
regions.  Member  States  are  reviewing  each  programme,  taking  into  account,  among  other 
things,  the  challenges  identified  in  the  European  Semester,  including  in  the  2024  country-
specific recommendations. This review forms the basis for a proposal by the Member State for 
the definitive allocation of 15% of EU funding included in each programme.  

Malta has made progress in implementing cohesion policy programmes and the European Pillar 
of Social Rights, but challenges remain as outlined in this report, including Annexes 14 and 17. 
Against this background, it remains important to continue implementing the planned priorities, 
with  particular  attention  to  the  following:  (i)  investments  in  energy  efficiency  and  renewable 
energy,  to  promote  energy  savings,  to  strengthen  sustainability  in  the  energy  sector  and  to 
reduce its dependence on international energy sources; (ii) boosting investments in sustainable 
multimodal solutions and active transport with a view to alleviate traffic congestion and curb 
emissions from road transport; (iii) stepping up efforts for sustainable water and waste water 
management; (iv) supporting circular economy practices and maximising the recycling potential 
in order to reduce landfilling and to attain recycling targets; (v) strengthening adult learning, to 
increase the skills level of the population and address labour shortages; and (vi) promoting the 
labour  market  and  social  integration  of  vulnerable  groups,  especially  third-country  nationals 
and persons with disabilities, and gender equality in the labour market. 

Malta could benefit from the opportunities provided by the  Strategic Technologies for Europe 
Platform (STEP) initiative to support the strategic autonomy of the EU and the competitiveness 
and sustainability of industry (13). 

issuing  a  recommendation  to  Malta  in  the 
2022 and 2023 Rule of Law Reports. 

in 

introduces  measures  to 
Malta’s  RRP 
improve  the  efficiency  of  the  justice 
system  although  a  lack  of  resources  is 
still  seen  as  a  major  stumbling  block 
towards  more  progress.  The  creation  of  a 
separate  prosecution 
service,  effectively 
relieving the police of most of its prosecutorial 
the  magisterial  courts,  has 
functions 
enabled  greater  specialisation  in  prosecutions 
and  more  time  for  the  police  to  devote  to 
investigations. However, a lack of resources in 
the courts is hindering the efficiency of justice. 
While  the  number  of  judiciary  members  is  at 
an  all-time  high,  with  a  net  increase  of  11 
judges and magistrates appointed since 2020 
(also as part of Malta’s commitments under its 
RRP),  the  number  of  judiciary  members  per 
low  and 
remains  comparably 
inhabitant 

(13)  Regulation (EU) 2024/795 

13 

specialisation is often lacking. The shortage of 
skilled  staff,  notwithstanding 
recruitment 
efforts  being  undertaken,  is  also  noteworthy. 
Any 
in  human  capital  must  be 
matched  by  increased  space  availability,  both 
in terms of court rooms and office space. 

increase 

Modernising certain work practices would 
also 
improve  the  functioning  of  the 
justice  system.  A  recent  revision  in  the 
appeals  procedure,  allowing  cases  to  proceed 
to  judgment  following  a  written  procedure 
rather than in open court, reduced the backlog 
in 
the  Courts  of  Appeal.  Several  other 
procedures,  governed  by  old  laws,  could  also 
benefit 
improvements.  Undertaking 
impact assessments to assess the effects that 
proposed 
the 
functioning of the courts could also reduce the 
burden  of  new  legislation  on  the  work  of  the 
formalised 
judiciary.  Also, 
in  the 
procedure  for  public  participation 
to  Malta 
legislative  process,  which 
receiving  a 
the 
from 
Commission in the 2023 Rule of Law Report. 

legislation  would  have  on 

recommendation 

is  no 

there 

from 

led 

 
 
 
KEY FINDINGS 

resilience  plan 

its  wide  policy  scope,  Malta’s 
With 
(RRP) 
recovery  and 
includes measures to address a series of 
structural  challenges  in  synergy  with 
other  EU  funds,  including  cohesion  policy 
funds, by: 

•  Electrifying 

road 

transport 

and 

introducing free public transport; 

•  Strengthening  and  widening 
grid, 

and 

electricity 
permitting  procedures 
energy projects; 

the 
streamlining 
renewable 

for 

• 

the  management 

Improving 
of 
construction and demolition waste and 
reorganising waste collection; 

•  Energy 

retrofitting 
commercial and public buildings; 

efficient 

of 

•  Strengthening the digitalisation  of the 

public sector; 

•  Reducing high shares of early school-
leavers  and  low-skilled  adults  and 
improving the inclusiveness of education; 

•  Fostering  resilience  of  the  health 

system; 

•  Strengthening  the  independence  and 
functioning of justice institutions, and 
improving  the  anti-corruption  and  anti-
money-laundering frameworks; 

•  Revising  the  tax  system,  including  by 
adopting  legislation  to  address  features 
enabling aggressive tax planning practices. 

for  a 
Continued  efforts  are  key 
successful 
the 
measures  of  Malta’s  recovery  and  resilience 
plan by August 2026.  

implementation  of  all 

14 

Beyond  the  reforms  and  investments  in 
the RRP and cohesion policy programmes, 
Malta would benefit from: 

•  Strengthening  fiscal  sustainability  of 
the  pension,  health  and  long-term  care 
systems, while maintaining their adequacy; 

•  Addressing  the  remaining  features  of 
the tax system that facilitate aggressive 
tax planning; 

•  Taking  concrete  steps  to  phase  out 
emergency energy support measures.  

• 

Increasing  efficiency  of  the  justice 
system to shorten court proceedings; 

•  Fostering research and innovation and 
improving  the  business  environment  and 
access to non-bank finance; 

•  Strengthening  the  quality  and  labour 
market  relevance  of  education  and 
training,  to  address 
low  educational 
outcomes  as  well  as  severe  skills 
shortages and mismatches; 

•  Strengthening  targeted  policies 

to 
ensure  equal  labour  market  access  and 
opportunities for all; 

•  Ensuring  adequate  and  effective 
social  protection  for  vulnerable  groups, 
including children; 

• 

Increasing  the  share  of  renewable 
energy in the energy mix; 

•  Alleviating 

congestion, 
traffic 
improving  the  quality  of  public  transport, 
and  improving  infrastructure  for  cycling 
and walking; 

•  Curbing 

the 

over-extraction 

of 
groundwater,  limiting  waste  generation, 
increasing 
improving 
biodiversity. 

recycling, 

and 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the Maltese RRP 

17 

21 

21 

23 

27 

29 

32 

34 

34 

38 

43 

45 

45 

47 

50 

52 

57 

59 

59 

61 

63 

65 

67 

67 

69 

71 

72 

24 
27 

 
 
 
Support from EU instruments in Malta 
Resilience indices across dimensions for Malta and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key Energy Indicators 
Key Energy Indicators 
Key indicators for a fair transition in Malta 
Circularity indicators 

A3.2.  Measures in Malta's RRP 
A4.1. 
A5.1. 
A6.1. 
A7.1. 
A7.1. 
A8.1. 
A9.1. 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Malta 
A14.2.  Situation of Malta on 2030 employment, adult learning and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level in Malta 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Malta 
A21.2.  Heat map of fiscal sustainability risks Malta 

LIST OF GRAPHS 

Progress towards the SDGs in Malta 

Trends in electricity prices for non-household consumers (EU and foreign partners) 

Total grants disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in Malta 
Distribution of RRF funding by pillar in Malta 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Changes in livestock density and organic farming 
Environmental investment gap, annual average 

A1.1. 
A2.1.  Malta’s progress on the 2019-2023 CSRs (2024 European Semester) 
A3.1. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1.  Malta's energy retail prices for households and industry & service 
A7.2. 
A7.3.  Malta's installed renewable capacity (left) and electricity generation mix (right) 
A8.1. 
Fair transition challenges in Malta 
A8.2. 
Job vacancy rate in transforming sectors and mining and quarrying 
A9.1. 
ETS emissions by sector since 2013 
A9.2. 
Treatment of municipal waste 
A11.1.  Public expenditure on R&D as a % of GDP 
A12.1.  Real labour productivity (GDP per hour worked), by sector, 2015=100 
A12.2.  Shares of services exports 
A13.1.  a) Government effectiveness, open government data and c) share of employees by education attainment level 
A15.1.  Underachievement in mathematics in Malta by country of birth, PISA 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A17.1.  Malta, NUTS3: GDP per capita, Average Annual GDP per capita growth, Average Annual Productivity Growth 
A18.1.  Evolution of credit activity by sector 
A19.1.  Tax wedge for single and second earners as a % of total labour costs, 2023 
A19.2.  Total outgoing dividends by Member States in % of GDP, 2022 

28 
31 
32 
37 
41 
42 
44 
46 
49 
51 
55 
58 
59 
60 
62 
64 
66 
68 
70 
71 
74 
74 

21 
23 
28 
30 
30 
34 
36 
36 
38 
39 
39 
43 
44 
45 
46 
50 
52 
53 
58 
61 
63 
63 
65 
67 
69 
70 

18 

 
 
 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

of 

four 

dimensions 

This Annex assesses Malta’s progress on the 
Sustainable Development Goals (SDGs) along 
the 
competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

related 

While Malta is improving on some of the SDG 
environmental 
indicators 
sustainability (SDGs 2, 9, 12, 13), though still 
above  the  EU  average,  it  is  moving  away 
from  SDG 7  (Affordable  and  clean  energy). 
Malta  performs  well  on  SDG 14  (Life  below 

to 

Although  Malta’s 

water). However, it is moving away from the 
target  and  needs  to  catch  up  with  the  EU 
average  on  SDG 11  (Sustainable  cities  and 
energy 
communities). 
consumption  per  capita  is  below  the  EU  average 
(SDG 7),  the  share  of  renewable  energy  in  gross 
final energy consumption (13.4%) is far below the 
EU  average  (23%  in  2022;  SDG 13).  As  for 
affordable  energy,  the  percentage  of  the  Maltese 
population unable to keep their homes adequately 
warm  has  increased  in  the  last  5 years  (7.6%  in 
2022  against  6.3%  in  2017)  but  is  below  the  EU 
average  (9.3%).  Waste  generation  per  capita  was 
significantly  higher  than  the  EU  average  in  2020 
(MT: 6 847 kg against EU: 4 813 kg) (SDG 12), and 
the  rate  of  recycling  for  municipal  waste  is  less 
than  a  third  of  the  EU  average  (12.2%  against 
48.6% for the EU in 2022; SDG 11). Only 7.4% of 
the Maltese population were connected to at least 
secondary  wastewater 
in  2021 
compared to 80.9% at EU level (SDG 11).  Various 
measures in the recovery and resilience plan (RRP) 
aim to contribute to better energy efficiency, clean 

treatment 

Graph A1.1: Progress towards the SDGs in Malta 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators - Eurostat (europa.eu). A high status does not mean that a country is close to reaching a specific SDG, but signals that it 
is doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

19 

 
 
 
 
 
 
 
energy,  sustainable  transport,  and  a  circular 
include  energy-efficiency 
economy.  Examples 
renovations  of  private  and  public  buildings, 
investment  in  renewable  energy  for  roads  and 
public  spaces,  promotion of  sustainable  transport, 
and  improvements  in  waste  management  and 
measures 
reuse, 
including 
in  the  construction  and  demolition 
industries.  Alongside  the  RRP  measures,  Cohesion 
Policy  also  supports  multimodal  solutions  to 
improve mobility (e.g. pedestrian pathways, cycling 
lanes)  and  investment  in  an  organic  processing 
plant to reduce the amount of organic waste that 
goes to landfill. 

recycling  and 

increase 

to 

While  Malta  performs  well  on  decent  work 
and  economic  growth  (SDG 8)  and,  though 
still below the EU average, it is improving on 
education and gender equality (SDGs 4, 5), it 
is moving away from several SDGs related to 
fairness,  including  those  addressing  poverty 
and  inequalities  (SDGs 1,  3,  7,  10).  Malta  has 
very low self-reported unmet medical needs (0.3% 
in 2022 against 2.2% for the EU), but the obesity 
rate is increasing  while  healthy  life  expectancy  at 
birth,  though  still  above  the  EU  average,  is 
decreasing (SDG 3). On SDG 4 (Quality  education), 
Malta has significantly decreased its share of early 
leavers  from  education  and  training,  which  fell 
from  14%  (2018)  to  10.0%  in  2023,  although  it 
remains  slightly  higher  than  the  EU  average 
(9.5%),  and  the  EU/non-EU  citizenship  gap  is 
for 
considerable 
levels 
improvement 
(32.6% 
in 
of 
mathematics  against  29.5%  for  the  EU  in  the 
OECD  Programme 
International  Student 
Assessment  (PISA)  2022).  The  share  of  children 
over  3  in  early  childhood  education  considerably 
decreased  from  95%  in  2016  to  86.2%  in  2021, 
far  below  the  EU  average  (92.5%).  Furthermore, 
the  gender  employment  gap  (SDG 5),  though 
improving,  is  particularly  wide  in  Malta  (14.2 
percentage  points  (pps)  against  10.2 pps  for  the 
EU in 2023). Although still below the EU  average, 
the  share  of  people  at  risk  of  poverty  or  social 
exclusion  (SDG 1)  is  rising  (20.1%  in  2022,  up 
from  19.4%  in  2017),  with  a  significant  urban-
rural  gap  (SDG 10).  Reforms  and  investments  in 
the  Maltese  RRP  are  helping  to  strengthen  the 
health  system  provide  quality  inclusive  education 
and  training,  and  promote  female  labour  market 
participation. 

(SDG 10).  There 
in 
increasing  basic  skills 
low-achieving  15-year-olds 

room 

for 

is 

However, 

respectively). 

On  SDG  indicators  related  to  productivity, 
Malta  performs  well  (SDG 8)  or  is  improving 
(SDGs 4,  9).  Malta  steadily  increased  its  tertiary 
education  rate  from  40.2%  in  2018  to  46.3%  in 
2023  (against  43.1%  for  the  EU;  SDG 4).  In 
addition, both adult participation in learning in the 
past  4 weeks  (16.5%)  and  the  percentage  of 
adults  with  at  least  basic  digital  skills  (SDG 4; 
63%)  are  above  the  EU  average  (12.7%  and 
55.6%, 
regarding 
innovation  (SDG 9),  the  Maltese  research  and 
innovation  system  suffers  from  underinvestment 
as  shown  by  the  indicator  on  gross  domestic 
expenditure  on  R&D  (0.69%  of  GDP  in  2022 
compared  to  the  EU  average  of  2.24%)  and  the 
share  of  R&D  personnel  (0.75%  of  the  active 
population in 2022 compared to the EU average of 
1.53%).  Complementing  the  Cohesion  Funds,  the 
RRP  targets  digitalisation  bottlenecks  to  improve 
progress  on  meeting  SDG 9  (Industry,  innovation 
and  infrastructure).  Cohesion  Policy  also  supports, 
amongst others, R&I infrastructure and equipment, 
and  the  development  of  a  business  incubation 
centre  strengthening 
the  competitiveness  of 
Malta’s economy. 

increased 

(SDG 8),  Malta  further 

Malta  performs  well  on  SDG 
indicators 
related  to  macroeconomic  stability  (SDGs 8, 
16,  17).  Regarding  decent  work  and  economic 
growth 
its 
employment rate from 74.9% in 2018 to 81.7% in 
2023,  which  is  very  high  compared  to  the  EU 
average  (75.3%  in  2023).  At  7.5%  in  2023,  the 
share  of  young  people  not 
in  employment, 
education  or  training  is  below  the  EU  average 
(11.2%) and long-term unemployment is very low 
(0.7%  against  2.1%  for  the  EU  in  2023).  General 
government  gross  debt,  at  50.4%  of  GDP,  is  far 
below  the  EU  average  (81.7%  of  GDP  in  2023) 
(SDG 17). Although overall Malta performs slightly 
above  the  EU  average  on  SDG 16  (Peace,  justice, 
and  strong  institutions),  Malta  scores  worse  than 
the  EU  in  the  Corruption  Perceptions  Index  (51 
compared  to  64  in  the  EU  in  2023,  with  0  being 
highly  corrupt  and  100  very  clean).  The  RRP 
includes reforms to address several long-standing 
institutional  challenges  relating  to  justice  as  well 
as  the  fight  against  corruption  and  money 
laundering. 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other Annexes. 

20 

 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

The Commission has assessed the 2019-2023 
country-specific  recommendations  (CSRs) (14) 
addressed  to  Malta  as  part  of  the  European 
Semester.  These  recommendations  concern  a 
wide  range  of  policy  areas  that  are  related  to  14 
of  the  17  Sustainable  Development  Goals  (SDGs) 
(see  Annexes  1  and  3). The  assessment  considers 
the  policy  action  taken  by  Malta  to  date (15)  and 
the  commitments  in  its  recovery  and  resilience 
plan 
RRP 
implementation,  56%  of  the  CSRs  focusing  on 
structural  issues  from  2019-2023  have  recorded 
at  least  ‘some  progress’,  while  42%  recorded 
‘limited  progress’  (see  Graph  A2.1).  As  the  RRP  is 
implemented  further,  considerable  progress  in 
addressing  structural  CSRs  is  expected  in  the 
coming years. 

(RRP) (16). 

stage 

this 

At 

of 

Graph A2.1: Malta’s progress on the 2019-2023 
CSRs (2024 European Semester) 

Source: European Commission. 

(14)  2023 CSRs: EUR-Lex - 32023H0901(18) - EN - EUR-Lex 

(europa.eu) 

2022 CSRs: EUR-Lex - 32022H0901(18) - EN - EUR-Lex 

(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(18) - EN - EUR-Lex 

(europa.eu) 

      2020 CSRs: EUR-Lex - 32020H0826(18) - EN - EUR-Lex 

(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(18) - EN - EUR-Lex 
(europa.eu) 

(15)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(16)  Member States were asked to effectively address in their 
RRPs all or a significant subset of the relevant country-
specific recommendations issued by the Council. The CSR 
assessment presented here considers the degree of 
implementation of the measures included in the RRP and of 
those carried out outside of the RRP at the time of 
assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which have not yet been adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

21 

No Progress2%Limited Progress42%Some Progress39%Substantial Progress12%Full Implementation5% 
 
 
 
 
 
 
     
 
 
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

22 

MaltaAssessment in May 2024*RRP coverage of CSRs until 2026**Relevant SDGs2019 CSR 1Some progressEnsure the fiscal sustainability of the healthcare and pension systems, including by restricting early retirement and adjusting the statutory retirement age in view of expected gains in life expectancy.Some progressRelevant RRP measures being implemented/planned as of 2022 to 2025. SDG 3,82019 CSR 2Some progressAddress features of the tax system that may facilitate aggressive tax planning by individuals and multinationals, in particular by means of outbound payments. Limited progressRelevant RRP measures being implemented/planned as of 2021 to 2024. SDG 8, 16Strengthen the overall governance framework, including by continuing efforts to detect and prosecute corruption. Some progressRelevant RRP measures being implemented/planned as of 2020 to 2026.SDG 16Continue the ongoing progress made on strengthening the anti-money-laundering framework, in particular with regard to enforcements. Substantial progressRelevant RRP measures being implemented/planned as of 2022 to 2023.SDG 8, 16Strengthen the independence of the judiciary, in particular the safeguards for judicial appointments and dismissals, and establish a separate prosecution service.Some progressRelevant RRP measures being implemented/planned as of 2021 to 2026.SDG 162019 CSR 3Some progressFocus investment-related economic policy on research and innovation, Limited progressRelevant RRP measures being implemented/planned as of 2022 to 2026. SDG 9natural resources management, Limited progressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 6, 12, 15resource and energy efficiency, Some progressRelevant RRP measures being implemented/planned as of 2021 to 2026.SDG 7, 9, 13sustainable transport, reducing traffic congestion and Limited progressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 11inclusive education and training.Some progressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 4, 8, 102020 CSR 1Some progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreNot applicableSDG 8, 16Strengthentheresilienceofthehealthsystemwithregardtothehealth workforce, critical medical products and primary care.Some progressRelevant RRP measures being implemented/planned as of 2021 to 2026. SDG 32020 CSR 2Limited progressConsolidate short-time work arrangements and ensure the adequacy of unemployment protection for all workers. Some progressRelevant RRP measures being implemented as of 2022. SDG 1, 2, 8, 10Strengthenthequalityandinclusivenessofeducationandskillsdevelopment.Limited progressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 4, 8, 102020 CSR 3Some progressEnsureeffectiveimplementationofliquiditysupporttoaffectedbusinesses, including the self-employed. Substantial progressNot applicableSDG 8, 9Front-load mature public investment projects Substantial progressNot applicableSDG 8, 16and promote private investment to foster the economic recovery.Some progressNot applicableSDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularonclean and efficient production and use of energy, Some progressRelevant RRP measures being implemented/planned as of 2021 to 2026. SDG 7, 9, 13sustainable transportSome progressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 11waste management,Some progressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 11research and innovation.Limited progressRelevant RRP measures being implemented/planned as of 2022 to 2026. SDG 6, 12, 152020 CSR 4Some progressCompletereformsaddressingcurrentshortcomingsininstitutionalcapacity and governance to enhance judicial independence. Some progressRelevant RRP measures being implemented/planned as of 2020 to 2026.SDG 16Continueeffortstoadequatelyassessandmitigatemoney-launderingrisksandtoensureeffectiveenforcementoftheanti-money-laundering framework. Substantial progressRelevant RRP measures being implemented/planned as of 2022 to 2023.SDG 8, 16Stepupactiontoaddressfeaturesofthetaxsystemthatfacilitateaggressive tax planning by individuals and multinationals.Some progressRelevant RRP measures being implemented/planned as of 2022 to 2024. SDG 8, 16 
 
 
 
   
 
Table (continued) 

(Continued on the next page) 

23 

2021 CSR 1Not relevant anymoreIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationally financed investment.Not relevant anymoreNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term.Not relevant anymoreNot applicableSDG 8, 16At the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthenationalbudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Not relevant anymoreNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Not relevant anymoreNot applicableSDG 8, 162022 CSR 1Substantial progressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjustcurrentspendingtotheevolving situation.Substantial progressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandother Union funds.Full implementationNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachieving prudent medium-term fiscal positions.Limited progressNot applicableSDG 8, 162022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 5 October 2021.Submitthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtofinalisingtheirnegotiationswiththeCommissionandsubsequently starting their implementation.2022 CSR 3Limited progressTakeactiontoeffectivelyaddressfeaturesofthetaxsystemthatmayfacilitateaggressivetaxplanningbyindividualsandmultinationalcompanies,includingbyensuringsufficienttaxationofoutboundpaymentsofinterests,royalties,anddividends,andamending the rules for non-domiciled companies.Limited progressRelevant RRP measures being implemented/planned as of 2021 to 2024. SDG 8, 162022 CSR 4Limited progressReduce overall reliance on fossil fuels.Limited ProgressRelevant RRP measures being implemented/planned as of 2022 to 2026. SDG 7, 9, 13Acceleratethedeploymentofrenewables,promotingandenablinginvestmentsinwindandsolarenergy,includinginfloatingoffshoreenergy,Limited ProgressRelevant RRP measures being implemented/planned as of 2023 to 2024. SDG 7, 9, 13furtherupgradingMalta’selectricitytransmissionanddistributiongrids,andcreatingincentivesforelectricitystoragetosupplyfirm,flexible and fast-responding energy.Some ProgressRelevant RRP measures being implemented/planned as of 2024 to 2026. SDG 7, 9, 13Reduceenergydemandthroughimprovedenergyefficiency,particularly in residential buildings.Limited ProgressRelevant RRP measures being implemented/planned as of 2021 to 2026. SDG 7Reduceemissionsfromroadtransportbyaddressingtrafficcongestionthroughimprovedservicequalityinpublictransport,intelligenttransportsystemsandinvestinginsoftmobilityinfrastructure.Limited ProgressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 112023 CSR 1Some progressWinddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable, and preserve incentives for energy savings.No progressNot applicableSDG 8, 16Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinancednetprimaryexpenditurein2024tonot more than 5.9% .Some progressNot applicableSDG 8, 16PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticularto foster the green and digital transitions.Full implementationNot applicableSDG 8, 16Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth, to achieve a prudent medium-term fiscal position.Limited progressNot applicableSDG 8, 162023 CSR 2Continuethesteadyimplementationofitsrecoveryandresilienceplanand,followingtherecentsubmissionoftheaddendum,includingtheREPowerEUchapter,rapidlystarttheimplementationoftherelatedmeasures.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywith the recovery and resilience plan.RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy.RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy programming is monitored in the context of the Cohesion Policy of the European Union. 
 
 
   
 
Table (continued) 

Note: 
* See footnote (16). 
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as “being implemented” 
are only those included in the RRF payment requests submitted and positively assessed by the European Commission. 
Source: European Commission. 

24 

2023 CSR 3Limited progressEffectivelyaddressfeaturesofthetaxsystemthatmayfacilitateaggressivetaxplanningbyindividualsandmultinationals,includingbyensuringsufficienttaxationofoutboundpaymentsofinterest,royaltiesanddividends,andamendtherulesfornon-domiciledcompanies.Limited progressRelevant RRP measures planned as of 2021 to 2024. SDG 8, 162023 CSR 4Limited progressReduce reliance on fossil fuelsLimited progressRelevant RRP measures being implemented/planned as of 2022 to 2026. SDG 7, 9, 13byacceleratingthedeploymentofrenewablesenergies,includingoffshore wind and solar energy,Limited progressRelevant RRP measures being implemented/planned as of 2023 to 2024. SDG 7, 9, 13andupgradeandexpandthecapacityoftheelectricitygridsystem,including transmission, distribution and battery storage.Some progressRelevant RRP measures being implemented/planned as of 2024 to 2026.SDG 7, 9, 13Reduceenergydemandthroughimprovedenergyefficiency,particularly in residential buildings.Limited progressRelevant RRP measures being implemented/planned as of 2021 to 2026.SDG 7Reduceemissionsfromroadtransportbyaddressingtrafficcongestionthroughimprovedservicequalityinpublictransport,intelligenttransportsystemsandinvestingin‘softmobility’infrastructure.Limited progressRelevant RRP measures being implemented/planned as of 2021 to 2025.SDG 11Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsand competences needed for the green transition.Some progressRelevant RRP measures being implemented/planned as of 2022 to 2023. SDG 4 
 
   
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

This  Annex  provides  a  snapshot  of  Malta’s 
implementation of its recovery and resilience 
plan  (RRP),  past  the  mid-way  point  of  the 
Recovery  and  Resilience  Facility’s 
(RRF) 
lifetime.  The  RRF  has  proven  central  to  the  EU’s 
recovery  from  the  COVID-19  pandemic,  helping 
speed  up  the  twin  green  and  digital  transition, 
while  adapting  to  geopolitical  and  economic 
resilience 
developments, 
against  future  shocks.  The  RRF  is  also  helping 
implement the UN Sustainable Development Goals 
and 
country-specific 
recommendations (see Annex 2).   

strengthening 

address 

and 

the 

The  RRP  paves  the  way  for  disbursing  up  to 
EUR 328 million in grants under the RRF over 
the  2021-2026  period, representing  1.7% of 
Malta’s GDP (17). As of mid-May 2024, EUR 166.4 
million has been disbursed to Malta under the RRF.  

Malta still has EUR 161.9 million available in 
grants  from  the  Recovery  and  Resilience 
Facility,  which  will  be  disbursed  after  the 
assessment  of  future  fulfilment  of  the  remaining 
83  milestones  and  targets (18)  included  in  the 
Council  Implementing  Decision (19)  (CID),  ahead  of 
the 2026 deadline established for the RRF.  

Malta’s  progress  in  implementing  its  plan  is 
recorded  in  the  Recovery  and  Resilience 
Scoreboard (20).  The 
scoreboard  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF as a whole. Graph A3.1 shows the current 
state of play as reflected in the scoreboard. 

Malta’s RRP includes a REPowerEU chapter to 
phase  out  its  dependency  on  Russian  fossil 
fuels,  diversify 
its  energy  supplies,  and 
produce  more  clean  energy  in  the  coming 
years.  To  kick-start  the  REPowerEU  chapter’s 
implementation,  EUR  14  million  was  disbursed  as 

(17)  GDP information is based on 2023 data. Source: 

https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/index.html?lang=en 

(18)  A milestone or target is satisfactorily fulfilled once a Member 
State has provided evidence to the Commission that it has 
reached the milestone or target and the Commission has 
assessed it positively in an implementing decision. 

(19)  https://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CONSIL:ST_11941_2021_ADD_1 

pre-financing  on  13  December  2023.  This  helped 
launch  relevant  reforms  like  the  reform  of  the 
permitting system for renewable energy projects. 

The  plan  has  a  strong  focus  on  the  green 
transition, dedicating 68.8% of the available 
funds  to  measures  that  support  climate 
objectives  and  26.2%  of  its  total  allocation 
to support the digital transition. It also retains 
a  strong  social  dimension  with  social  protection 
measures,  especially  related  to  quality  inclusive 
education.   

Table A3.1:  Key facts of the Maltese RRP 

Source: RRF Scoreboard 

With  two  payment  requests  completed, 
Malta’s  implementation  of  its  RRP  is  well 
underway.  The  Commission  gave  a  positive 
assessment  of  Malta’s  first  payment  request  on 
27  January  2023,  taking  into  account  the  opinion 
of the Economic and Financial Committee. This led 
to  EUR  52.3  million  being  disbursed  in  financial 
support  on  8  March  2023 (21).  The  related  19 
milestones  and  targets  covered  reforms  and 
investments such as the adoption of a strategy to 
reduce waste through recycling in the construction 
sector,  the  establishment  of  office  facilities  to 
enable  civil  servants  to  work  remotely  across  the 
country,  reforms  to  boost  industrial  research  and 
investments,  a  national  anti-fraud  and  corruption 
strategy  and  reforms  to  digitalise  the  justice 
system. 

(20)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

(21)  When requested payments are disbursed, the pre-financing 
is cleared proportionally. The net amounts are quoted here.   

25 

Initial plan CID adoption date13 July 2021Scope Revised plan with REPowerEU chapterLast major revision17 October 2023Total allocation EUR 328 billion in grants (1.7% of 2023 GDP)Investments and reforms 16 investments and 31 reforms Total number of milestones and targets136Fulfilled milestones and targets53 (39% of total) 
 
 
 
   
 
 
 
The most  recent payment request, which the 
Commission assessed positively on 26 March 
2024,  led  to  the  disbursement  of  EUR  58.9 
million  on  16  May  2024.  The  disbursement 
the  positive  assessment  of  34 
reflected 
milestones  and  targets  covering  among  others 
sustainable  mobility,  healthcare, 
in 
information technology, life-long learning, inclusive 
judiciary,  anti-money 
education,  capacity  of 
laundering,  and  corporate  taxation  as  well  as 
energy  efficiency  in  private  and  public  buildings 
electrification  of 
transport,  digitalisation  of 
businesses and public administration. 

training 

Graph A3.1: Total grants disbursed under the RRF 

Table A3.2:  Measures in Malta's RRP 

Source: FENIX 

Note: This graph displays the amount of grants, including pre-
financing,  disbursed  so  far  under  the  RRF.  Grants  are  non-
repayable financial contributions. The total amount of grants 
given  to  each  Member  State  is  determined  by  an  allocation 
key and the total estimated cost of the respective RRP. 
Source: RRF Scoreboard 

Malta  is  working  towards  its  third  payment 
request.  Table  A3.2  highlights  some  relevant 
measures  achieved  so  far,  and  some  that  will  be 
implemented before 2026 to keep making Malta’s 
economy  greener,  more  digital,  inclusive,  and 
resilient.  

26 

EUR 166.4million (50.7%)Total allocation: EUR 328millionReforms and investments implemented• Introduction of transfer pricing rules to reduce corporate profit shifting opportunities• Adoption of standards for the construction industry • Capacity building within the Attorney General's Office Upcoming reforms and investments• Strengthening and widening the electricity distribution network • Large-scale electrification of road transport• Support to low-income families to mitigate the digital divide 
   
 
   
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member  States.  In  addition  to  the  EUR 328.2 
million  of  Recovery  and  Resilience  Facility  (RRF) 
funding  described  in  Annex  3,  EU  cohesion  policy 
funds (22)  provide  EUR 772.8  million  to  Malta  in 
2021-2027 (23). 
two 
instruments combined represent around 5.68% of 
the  country’s  2023  GDP,  compared  to  the  EU 
average  of  5.38%  of  GDP (24).  Cohesion  policy 
supports  regional  development,  economic,  social 
and  territorial  convergence  and  competitiveness 
through  long-term  investment  in  line  with  EU 
priorities and with national and regional strategies. 

Support 

these 

from 

During  the  2014-2020  programming  period, 
funds  boosted  Malta’s 
cohesion  policy 
competitiveness, with  tangible achievements 
notably  in  research  and  innovation,  water 
supply, energy efficiency and social inclusion. 
Over the whole period, which financed investments 
until  December  2023,  cohesion  policy  funds (25) 
made EUR 830.3 million available to Malta (26), of 
which EUR 477.1 million has been disbursed since 
COVID-19 
when 
March 
pandemic began (27). 
of 
The 
cohesion  policy  funds  over  the  programming 
the 
period 
sustainability  of  water  resources,  to  invest  in 
water  production  infrastructure  and  to  invest  in 
the  primary  distribution  network,  which  improved 
the  water  supply  for  the  population  of  Malta, 
including  over  39  000  people  on  the  island  of 
Gozo through the setting up of a Reverse Osmosis 
plant  at  Ħondoq.  Cohesion  policy  also  funded 

the 
achievements 

improve 

support 

include 

2020 

to 

(22)  In 2021-2027, cohesion policy funds include the Cohesion 
Fund, the European Regional Development Fund, the 
European Social Fund Plus and the Just Transition Fund. 

(23)  European territorial cooperation (ETC) programmes are 
excluded from the figure. In 2021-2027, the total 
investment, including national financing, amounts to EUR 1.2 
billion. 

(24)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2022. 

(25)  In 2014-2020, cohesion policy funds included the Cohesion 
Fund, the European Regional Development Fund and the 
European Social Fund. REACT-EU allocations are included but 
ETC programmes are excluded. 

(26)  In 2014-2020, the total investment, including national 

financing, amounted to EUR 985.0 million. 

(27) Cut-off date: 15 May 2024. 

27 

investments 
in  public 
in  energy  efficiency 
buildings,  yielding  a  decrease  in  annual  primary 
energy consumption in selected public buildings of 
over 2 000 000 kWh/year. 

culture 

creating  a 

On  research  and  innovation,  cohesion  policy 
to  action 
funds  contributed 
to  boost 
industry-academia 
collaborations,  while 
facilitating  a  multidisciplinary  approach  to 
research  and 
for 
innovation.  In  particular,  cohesion  policy  funded 
the  creation  of  a  transdisciplinary  research  and 
knowledge  exchange  complex  at the University  of 
Malta.  The  complex  enabled  67.3  researchers,  in 
full time equivalents, to work in improved research 
infrastructure  facilities.  Over  the  same  period, 
nearly 11 000 people received support from active 
inclusion  and  anti-poverty  measures,  funded  by 
the  European  Social  Fund  (ESF)  in  Malta.  These 
measures  supported  the  most  vulnerable  groups. 
Over  50%  of  recipients  were  low-qualified,  30% 
were  under  the  age  of  25  and  17%  of  recipients 
had a disability. 

In  the  current  programming  period,  cohesion 
policy will provide a further boost to Malta’s 
competitiveness,  to  the  green  transition  and 
to  social  cohesion,  improving  the  living  and 
working  conditions  of  Malta’s  people.  In 
2021-2027,  the  European  Regional  Development 
Fund (ERDF) and the Cohesion Fund will contribute 
to  improving  Malta’s  energy  mix  and  securing 
electricity supply. This will involve increasing green 
energy  imports,  supporting  118 km  of  electricity 
transmission  and  distribution  network  lines  by 
developing  the  second  electricity  interconnector 
linking  Italy  and  Malta  and  by investing in  energy 
storage  solutions  to  provide  160MWh  of  storage 
capacity  for  electricity.  Malta  also  plans  to  foster 
sustainable  multimodal  urban  mobility  by 
developing  17.5 km  of  clean  urban  transport 
infrastructure, including pedestrian paths and cycle 
lanes.  

The Just Transition Fund will focus on action 
to  decarbonise  the  maritime  sector  by 
installing  37  alternative  fuel  points  in  the 
Grand  Harbour  and  Malta  Freeport.  This  will 
result in a substantial reduction in greenhouse gas 
emissions from the maritime sector. The European 
Social Fund Plus (ESF+) will fund action to improve 
education and training and to develop skills. It has 
a  budget  of  around  EUR 53.3  million  in  Malta  for 
action including developing green and digital skills 

 
 
 
 
and developing life-long learning, for over 53 000 
participants and nearly  700 SMEs. With this work, 
cohesion  policy  substantially  contributes 
to 
achieving  the  UN  Sustainable  Development  Goals 
(SDGs)  in  Malta,  in  particular  SDG 7  (Affordable 
and  clean  energy),  SDG  8  (Decent  work  and 
economic growth) and SDG 9 (Industry, innovation, 
infrastructure). 

for  SMEs, 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually  reinforcing  impact  in  Malta.  For 
instance,  on  energy  efficiency,  the  ERDF  will 
provide  financial  support  to  marketable  projects 
for SMEs and households, supporting projects that 
meet  energy  efficiency  criteria.  To  complement 
this support, the RRP will provide grants to improve 
energy  efficiency 
reduce  energy 
demand,  lower  carbon  emissions  and  limit  energy 
waste  by  retrofitting  public  and  private  buildings. 
Together, cohesion policy and the RRP also support 
the electricity distribution grid, distribution services 
and battery storage. The RRP investment will help 
design and build a pilot battery storage facility of 
at least 10MWh by 2026. On this basis, the ERDF 
battery  storage  investment  will  roll  out  and 
upscale  battery  storage  of  up  to  160MWh  by 
2030.  Battery  storage  facilities  are  preconditions 
for developing offshore wind and solar projects, to 
enable Malta to increase the currently low share of 
renewables  in  its  energy  mix.  In  this  regard,  the 
RRP  reform  of  permitting  systems  to  streamline 
processes 
permit-granting 
accelerate 
procedures for renewable energy projects will aim 
to facilitate the uptake of renewable technologies. 
The ERDF will support pilot projects to explore blue 
renewable energies opportunities.  

and 

Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in Malta 

Source: European Commission 

There  are  also  complementarities  between 
the  RRF  and  the  ESF+.  For  instance,  both 

28 

instruments  tackle  workforce  challenges  in  the 
health sector. The ESF+ contributes to measures to 
upgrade the skills of healthcare professionals and 
the RRP supports actions to develop a bespoke tool 
for workforce planning and a reform to implement 
measures to improve the wellbeing and integration 
of  foreign  health  workers.  The  contribution  of 
cohesion  policy  and  RRF  funding  by  policy 
objective is illustrated by Graphs A4.1 and A4.2. 

Graph A4.2: Distribution of RRF funding by pillar in 
Malta 

(1)  Each  RRP  measure  helps  achieve  the  aims  of  two  of  the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
Malta. 
Source: European Commission 

The Technical Support Instrument (TSI) helps 
Malta  invest in its public administration and 
create a better enabling environment for EU 
and  national  investment.  The  TSI  has  funded 
projects in Malta to design and implement growth-
enhancing  reforms  since  2017.  The  support 
provided  in  2023  included  help  (i)  to  implement 
the  business  reorganisation  action  plan  of  the 
office of the attorney general and the office of the 
state  advocate;  (ii)  to  improve  tax  compliance  by 
implementing  real-time  reporting;  and  (iii)  to 
improve  the  quality  of  tax  information  exchanged 
between  Member  States  under  the  Directive  on 
administrative cooperation.  

The  TSI  also  helps  Malta  implement  specific 
reforms and investments included in its RRP, 
for  example  on  clean,  smart  and  fair  urban 
transport;  on  the  renovation  wave  and  on  coastal 
protection to help adapt to climate change.  

Malta  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed 
in Table A4.1. 

PO1 Smarter EuropePO2 Greener EuropePO3 Connected EuropePO4 Social EuropePO5 Europe closer to citizensPO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generation 
   
   
Table A4.1:  Support from EU instruments in Malta 

(1) RRF implementation period is 2021-2026. 
(2)  The  public  sector  loan  facility’s  programming  period  is  2021-2025  and  the  amount  reflects  the  national  share  in  its  grant 
component reserved until the end of the period. 
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027. 
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8)  The  amount  of  the  EU  guarantee  signed  under  the  EFSI  Infrastructure  and  Innovation  Window  was  derived  based  on  the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023).  
(10) SURE - European instrument for temporary support to mitigate unemployment risks in an emergency. 
Source: European Commission 

29 

Amount 2021-2027 (EUR million)Cohesion policy772.8RRF grants (1)328.2Public sector loan facility (grant component) (2)1.8Common agricultural policy (3)122.0EMFF/EMFAF (4)Connecting Europe Facility (5) 23.4Horizon 2020 / Horizon Europe (6) 39.4LIFE programme (7) 1.3Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8) 40.1InvestEU 2021-2027 (9) 0.0PeriodTotal amount available (EUR million)Disbursed amount (EUR million)SURE (10)2020-2022 420.8 420.8200.0EU grantsAmount 2014-2020 (EUR million)830.3-- 16.8 0.0EU loans 72.7 37.512.9EU guaranteesEU Guarantee (EUR million) 
 
  
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for Malta and the EU-27 

(1)  The synthetic indices aggregate the relative resilience situation of countries across all considered indicators. For an indicator, 
each  country’s  relative  situation  in  the  latest  available  year  is  compared  with  the  collection  of  values  of  that  indicator  for  all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

(RDB) (28) 
resilience 

This  Annex  uses  the  Commission’s  resilience 
to  show  Malta’s 
dashboards 
relative 
and 
vulnerabilities (29)  that  may  be  of  relevance 
for  societal,  economic,  digital  and  green 
transformations, and for dealing with future 
shocks and geopolitical challenges. (30) 

capacities 

According  to  the  RDB’s  set  of  resilience 
indicators,  Malta’s  overall  vulnerabilities 
have  remained  stable  medium-low  level, 
while  the  country  has  strengthened 
its 
overall  resilience  capacities,  now  matching 
the  medium-high  EU  average.  Over  50%  of 
indicators  are 
Malta’s  vulnerability 
low  and 
medium-low,  putting 
in  a  relatively  good 
it 
position. Around 50% of its capacity indicators are 
high and medium-high, with the proportion of low 

(28)  https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability not only to withstand and cope with challenges but 
also to undergo transitions, in a sustainable, fair, and 
democratic manner. 2020 Strategic Foresight Report: 
Charting the course towards a more resilient Europe 
(COM(2020) 493). 

(29)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals, 
while capacities refer to enablers or abilities to cope with 
crises and structural changes and to manage transitions. 

(30)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

30 

and  medium-low  resilience  capacities  remaining 
relatively high, at more than 30% of all indicators.  

In  the  social  and  economic  dimension,  Malta 
has remained stable in terms of its medium-
low vulnerabilities and its medium capacities. 
It  would  do  well to  further  reduce its  already  low 
proportion of young people neither in employment 
nor  in  education  and  training  (NEETs).  The  main 
reasons for its low capacities are health and social 
protection and its low Programme for International 
Student  Assessment  (PISA)  scores.  At  the  same 
time, Malta’s population enjoys one of the highest 
numbers  of  healthy  life  years  at  birth  in  the  EU, 
and a high employment rate.  

In  the  green  dimension,  Malta’s  capacities 
have  remained  medium-low,  as  in  2023, 
below  the  EU  average  but  improved  its 
vulnerabilities  to  reach  the  EU  average.  The 
its  dry  semi-arid  climatic 
country,  due 
conditions,  has  one  of  highest  WEI+  rating  in  the 
EU  and  could  further  decrease  its  consumption 
footprint  per  capita  and  increase  its  e-waste 
recycling  rate.  On  a  positive  note,  its  resource 
productivity has increased.  

to 

the 

dimension, 
capacities 

Malta’s 
In 
digital 
remained 
vulnerabilities  and 
stable. Malta is one of the EU  countries with the 
most  advanced  digital  competences  of  young 
people,  and  one  of  the  EU’s  top  performers  in 
terms of the preparedness for the digital transition 
of  its  information  and  communication  technology 
(ICT)  sector,  which  has  the  highest  gross  value 
added  in  the  EU,  considerable  research  and 

MTMTEU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowDimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0.680.630.50Capacities0.580.640.67VulnerabilitiesSocial and economicVulnerabilities0.610.620.47Capacities0.460.470.670.800.800.65GreenVulnerabilities0.350.500.44Capacities0.380.310.70CapacitiesGeopoliticalVulnerabilities0.480.270.41Capacities0.810.860.65DigitalVulnerabilities0.860.800.52Capacities0%20%40%60%80%100%Vulnerabilities(55 indicators)Capacities(62 indicators) 
 
 
 
   
 
 
development  activity,  and  many  businesses 
seeking ICT specialists.  

Malta’s  geopolitical  vulnerabilities  have 
increased  to  medium-high,  but  its  capacities 
remain above the EU average. The reasons for 
this are Malta’s high import dependence in energy 
materials,  and  a  high  concentration  of  energy 
suppliers and value chain partners. Its geopolitical 
capacities are above the EU average thanks mainly 
to  its  trade  openness  both  towards  the  EU  and 
other  countries,  and  the  attractiveness  of  its 
labour market, which has the highest proportion of 
non-EU  citizens  in  total  employment  and  a  high 
and positive net migration rate. 

31 

 
 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

Malta  has  made  progress 
in  the  green 
transition,  with  more  action  needed  on 
advancing  the  policies  to  attain  its  2030  effort 
sharing  target,  addressing  emissions  from  road 
transport  and  buildings,  climate  adaptation  – 
notably  sustainable  water  management  and  the 
institutional  framework,  the  circular  economy  and 
other  areas;  as  well  as  specifying  the  funding 
framework.  This  Annex  provides  a  snapshot  of 
climate, energy, and environmental aspects of the 
transition in Malta (31). 

46.3%  above  2005  levels  by  2030.  In  its  draft 
updated NECP, Malta has not provided a projection 
of  2030  effort  sharing  emissions  with  additional 
policies. Based on current projections, with existing 
policies,  Malta’s      effort  sharing  emissions  will 
exceed  its  2030  target  by  over  65  percentage 
points,  highlighting  the  need  for  more  ambitious 
climate  action (34).  According  to  the  draft  updated 
NECP,  Malta  is  planning  to  move  towards  climate 
neutrality  by  2050,  but  it  does  not  specify  a 
concrete date when this will actually be achieved. 

is 

(NECP) 

lacking 

Malta’s  draft  updated  national  energy  and 
climate  plan 
key 
information  on  the  investment  and  funding 
sources  needed  to  achieve  its  2030  climate 
lacks 
and  energy  targets.  The  draft  plan 
information  on 
to 
the 
implement policies and measures. It includes only 
an  estimate  of  the  investment  needed  for  2020–
2050,  based  on  Malta's  long-term  strategy,  with 
but little detail provided. The plan does not outline 
the  main  sources  of  financing  for  most  planned 
policies  and  measures.  Where  it  does  mention 
sources,  it  does  not  specify  the  share  of  each 
source of funding (national, EU, and private) (32). 

investment  needed 

The  policies  and measures  currently  in  place 
are  not  sufficient  to  reach  Malta’s  2030 
effort  sharing  target (33),  and  the  country  has 
not  specified  further  planned  action  in  its  draft 
updated  NECP.  In  2022,  Malta’s  greenhouse  gas 
emissions  from  its  effort  sharing  sectors  are 
expected  to  be  35.1%  above  2005  levels.  Based 
on  current  projections,  existing  policies  are 
projected to contain the rise of these emissions at 

(31)  This Annex is complemented by Annex 7 on energy transition 

and competitiveness, Annex 8 on the fair transition to 
climate neutrality, Annex 9 on resource efficiency, circularity, 
and productivity, and relevant topics in other annexes to this 
country report. 

(32)  See the Commission’s (2023) assessment of the draft 

national energy and climate plan of Malta.. 

(33)  The national greenhouse gas emission reduction target is 
laid down in Regulation (EU) 2023/857 (the Effort Sharing 
Regulation). The aims is to align action in the sectors 
concerned with the objective to reach the EU-level economy-
wide target of greenhouse gas reductions of at least 55% 
compared to 1990 levels. The target also applies to the 
sectors outside the current EU Emissions Trading System, 
notably buildings (heating and cooling), road transport, 
agriculture, waste, and small industry (known as the effort 
sharing sectors). 

32 

Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environment Agency 

from 

Greenhouse  gas  emissions 
road 
transport  and  buildings  are  a  significant 
concern  for  Malta.  In  2022,  greenhouse  gas 
emissions from road transport increased by 23.3% 
from 2005 levels, and their share in effort sharing 
emissions  remained  stable  at  47.2%  in  2022, 
slightly down from 51.5% in 2005. Between 2005 
and  2022,  Malta’s  effort  sharing  emissions  from 
buildings  increased  by  28.8%.  Designing  policies 
and  measures  to  curb  greenhouse  gas  emissions 
in these sectors is key if Malta is to reduce the gap 
with  its  2030  effort  sharing  target.  Malta  should 
also  aim  to  reduce  F-gases  from  air  conditioning 
by  promoting 
the  adoption  of  eco-friendly 
alternatives  and  ensuring  proper  servicing  and 
disposal practices. Ahead of the emissions trading 
system for road transport and buildings, due to be 

(34)  The effort sharing emissions for 2022 are based on 
approximated inventory data. The final data will be 
established in 2027 after a comprehensive review. Malta’s 
draft updated NECP does not provide emission projections 
for the effort sharing sectors. The information on projections 
of effort sharing emissions ‘with existing measures’ (WEM) 
and ‘with additional measures’ (WAM) is based on the latest 
data that had to be reported by 15 March 2023 under Article 
18 of Regulation 2018/1999 (the Governance Regulation). 

00011111220052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
 
 
 
  
 
 
 
rolled out in 2027, measures targeting vulnerable 
consumers appear pertinent.  

Malta’s  target  for  renewable  energy  and 
energy  efficiency 
its  draft  updated 
in 
NECP remain  low (35).  Malta’s  draft  updated 
NECP  did  not  set  a  target  for  renewable  energy 
contribution  by  2030.  With  a  2022  share  of 
13.4%,  there  is  a  large  ambition  gap  towards  its 
indicative contribution of 28% in 2030. Its energy 
efficiency  contributions  of  0.96  Mtoe  in  primary 
energy consumption and 0.80 Mtoe in final energy 
consumption  for  2030  set  in  its  draft  updated 
NECP are both less ambitious than those required 
under the Energy Efficiency Directive.   

Actions  in  Malta  to  curb  rising  greenhouse 
gas  emissions  from  road  transport  have  not 
been  sufficient (36).  Malta’s  take-up  of  battery 
electric  vehicles  is  slow.  In  2022,  electric  vehicles 
represented  only  0.8%  of  its  passenger  car  fleet. 
In  2023,  the  country  provided  one  publicly 
accessible  charging  point  for  every  33  e-vehicles, 
far below the EU average of 1:10. Passenger cars 
account for 86% of distances travelled, with buses 
and  coaches  accounting  for  the  rest.  All  domestic 
freight 
is  transported  by  road.  Malta  faces 
significant traffic congestion (37).  

(LULUCF) 

Malta’s  land  use,  land  use  change,  and 
forestry 
successfully 
achieves  net  carbon  removals.  To  reach  the 
2030  LULUCF  target,  additional  carbon  removals 
of  2 kt CO2eq  are  needed (38).  According  to  latest 
projections, Malta is on track to meet this target. 

sector 

On  climate  adaptation,  weaknesses 
in 
Malta’s  institutional  framework  are  a  key 
challenge.  Malta  remains  vulnerable  to  flash 

(35)  The EU target set out in the revised Renewable Energy 

Directive is to have 42.5% of gross final energy consumption 
coming from renewable energy sources by 2030, with the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
Malta at 829 ktoe for primary energy consumption and 687 
ktoe for final energy consumption. See the Commission 
Recommendation of 18.12.2023 to Malta. 

(36)  Unless otherwise indicated, data in this section refer to 
2021. See European Commission, 2023, EU transport in 
figures, transport.ec.europa.eu. 

urban floods, water scarcity and heatwaves, with a 
low  but  improvable  climate  protection  gap (39). 
Malta’s  2015  climate  action  act  introduces  an 
obligation to adopt and regularly update a national 
adaptation  strategy.  Malta  has  identified  several 
critical  sectors  that  require  adaptation.  These 
include  water  management,  infrastructures  and 
transport,  land  use  and  buildings,  agriculture,  and 
fisheries. Despite recent progress, significant work 
remains  to  be  done  to  bring  Malta’s  adaptation 
frameworks, policies, planning and implementation 
up  to  the  required  level  of  maturity (40).  Malta  is 
risk 
currently  drawing  up  a 
assessment,  to  lay  the  ground  for  integrating 
climate resilience into sectoral policies.  

vulnerability 

Sustainable  water  management  is  a  concern 
for  Malta  given  its  high  level  of  water  scarcity 
due to the prevailing semi-arid climatic conditions 
and  high  demand  for  water  from  the  urban  (high 
population  density)  and  agricultural  sectors. 
Excessive  abstraction  of  groundwater  from  the 
mean-sea 
is  causing 
level  aquifer  system 
groundwater  salinization.  The  annual  investment 
gap  to  achieve  sustainable  water  management  is 
expected to reach EUR 33 million over 2021-2027. 
The  water  exploitation  index  plus  (WEI+)  stood  at 
29.6%  in  2019  with  the  worst  seasonal  value  at 
74.9%  in  Q1-2019.  All  of  Malta’s  territory  faced 
water  scarcity 
conditions  over  2000-2020. 
Croplands  are  generally  the  most  damaged 
ecosystem.  According  to  the  second  river  basin 
management  plan,  only  37%  of  Malta’s  surface 
water  bodies  are  in  a  good  ecological  status  and 
53% are in a good chemical status. Not all marine 
waters  are  in  a  good  environmental  status.  Good 
status  was  not  achieved  for  non-indigenous 
species  and  fish  and  commercial  species,  as 
tracked  by  the  descriptors  used  in  the  Marine 
Strategy Framework Directive (MSFD).  

Air  quality  in  Malta  is  generally  good,  with 
exceptions.  The  latest  available  annual  estimates 
(2021)  by  the  European  Environmental  Agency 
point  to  Malta  suffering  about  426  years  of  life 
lost for every 100,000 inhabitants due to exposure 
to particulate matter (PM2.5) and 21 due to NO2. 
Furthermore,  the  indicator  for  smog-precursor 
emission  intensity  to  GDP  decreased  by  83% 

(37)  In 2020, road vehicle drivers experienced peak-hour delays 

(39)  On the climate protection gap, see the annotations to Table 

of 82 hours on average (EU average: 29 hours). 

A6.1. 

(38)  National LULUCF targets of the Member States in line with 

(40)  See the Commission’s 2023 assessment and 

Regulation (EU) 2023/839. 

recommendation on Malta’s progress on climate adaptation. 

33 

 
 
 
between  2008  and  2021, 
reaching  0.42 
tonne/EUR’10.  All  three  metrics  are  below  the  EU 
average. 

Malta  continues  to  face  challenges  in  the 
areas  of  biodiversity  and  nature  protection 
and  restoration.    At  the  end  of  2021,  29%  of 
Malta’s land area and 5.5% of its marine area was 
under  protection.  According  to  the  report  on  the 
conservation  status  of  protected  habitats  and 
species  covered  by  Article  17  of  the  Habitats 
Directive,  in  2013-2018,  28%  of  habitats  and 
53%  of  species  were  in  a  good  conservation 
status.  Managing  the  Natura  2000  network 
effectively  can  help  to  prevent  or  mitigate  the 
effects  of  climate  change.  This  will  require 
sustainable  agriculture,  forestry,  and  fisheries 
practices.  Introducing  stronger  measures  would 
help ensure that the activities of these sectors are 
compatible  with  the  conservation  of  protected 
species.  Investing  in  green  technologies,  reducing 
environmental harmful subsidies, shifting taxation 
to  the  environment,  and  increasing  taxes  on 
pesticides  and  fertilisers,  could  be  part  of  the 
solution. 

Graph A6.2: Changes in livestock density and 
organic farming 

Livestock  unit  (LSU)/ha  of  UAA:  it  measures  the  stock  of 
animals  (cattle,  sheep,  goats,  equidae,  pigs,  poultry  and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

Malta  would  benefit  from  accelerating  the 
transition  to  sustainable  agriculture.  The 
annual  output  of  Malta’s  agricultural  sector 
decreased between 2015 and 2023, reaching EUR 
114 million. The share of organic agriculture is still 
low  and  traditional  practices  do  not  always 
guarantee  high  ambition  in  terms  of  nature 
protection.  Urgent  measures  could  help  to  reduce 
the current water use rate, while also accelerating 
to  sustainable  agri-food  and 
the 

transition 

34 

and 

biodiversity 

protecting 
ecosystems. 
Specifically,  replacing  water-intensive  crops  with 
less  water-intensive  ones  could  alleviate  the 
pressure  on  water  bodies.  The  New  Water 
Programme  is  set  to  provide  reclaimed  water  for 
agricultural irrigation. The country is vulnerable to 
climate  change-related  events  such  as  wildfires 
and  drought. 
through 
sustainable agricultural practices can help increase 
soil  moisture  and  reduce  the  effects  of  droughts. 
Between  2010  and  2020,  the  livestock  density 
decreased  in  most  of  the  Member  States.  Malta’s 
livestock  density  index  decreased  from  3.52%  to 
3.27%, remaining the second highest in the EU. 

Improving  soil  health 

Food  waste  production  remains  relatively 
high  while  composting  and  digestion  levels 
could be improved. The country produced 154 kg 
of  food  waste  per  capita  in  2020,  above  the  EU 
average  of  131  kg  per  capita.  Most  of  it  was 
in 
generated  during  household  activities  and 
restaurants  and  food  services.  Composting  and 
digesting  levels  are  insufficient  to  treat  such  a 
large volume of food waste.   

Malta  would  benefit  from  investing  more  in 
pollution  prevention  and  control  and  water 
management.  Over  the  2014-2020  period,  the 
environmental  investment  gap  was  estimated  at 
EUR 76.1 million per year, or 0.4% of GDP. The gap 
is estimated to be increasing over the 2021-2027 
period at EUR 98.9 million per year. There remains 
an  opportunity  to  increase  funding  for  pollution 
prevention  and  control  (a  gap  of  EUR  34  million), 
and  sustainable  water  management  (EUR  33 
million). 

Graph A6.3: Environmental investment gap, annual 
average 

The  numbers  are  computed  by  the  EC  based  on  the  latest 
internal reports, Eurostat, EIB and national data sources. 
Source: European Commission 

01234024681020162020% LSU per hectare% of total utilised agricultural areaLivestock density index Malta (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming Malta (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area)30937034333100102030405060708090100Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
   
   
 
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions  for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.(10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. 

35 

Target200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp1,020.628%17%33.5%35.1%-19%-65-65Net greenhouse gas removals from LULUCF (2)Kt CO2eq069112n/an/aShare of energy from renewable sources (1) (3)%0%8%11%13%13%28%--Energy efficiency: primary energy consumption (3)Mtoe0.90.90.70.80.90.8Energy efficiency: final energy consumption (3)Mtoe0.50.70.50.60.70.7Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---0.60.7769.0786.60.6Share of zero-emission vehicles in new registrations (4)% 2.23.71.21.51.9912.1n/aNumber of publicly accessible AC/DC charging points --989695299178446956n/aShare of electrified railways%-----56.1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---0.20.2537.0486.70.2Final energy consumption in buildings2015=100105.9%111.6%105.7%110.4%120.6%104.0%97.2% Climate adaptation         Climate protection gap (5)score 1-4--2.31.41.41.51.5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater26.129.6---3.6--Circular economy | Material footprint (7)tonnes per person9.512.313.513.010.714.214.814.9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants466499335426-545584-Biodiversity | Habitats in good conservation status (9)%27.614.7                       Common farmland bird index (10)2000=100-----78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area0.410.470.620.61-9.1--Nitrates in groundwatermg NO3/litre-----20.42--Food waste per capitaKg per capita154--130131-Share of soil in poor health (11)%-41Soil organic matter in agricultural land (12)Mt per ha-----7,904--DistanceEU-27 
 
     
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

Malta managed to reduce its gas demand between 
August  2022  and  December  2023  by  10%  in 
comparison  with  the  average  of  the  previous  five 
years.  

To  further  strengthen  the  security  of 
electricity  supply  in  the  country,  a  decision 
was  taken  to  invest,  with  the  support  of 
in  a  second  200  MW 
Cohesion  funds, 
electricity  sub-sea  link  with  Italy  (Sicily)  by 
2026.  This  second  cable  link  with  Italy  would 
contribute  to long-term  security  of  supply  as  well 
as  allow  for  the  integration  of  a  higher  share  of 
renewable energy sources.    

Graph A7.1: Malta's energy retail prices for 
households and industry & service 

(1) For industry, consumption bands are I3 for gas and IC  for 
electricity,  which  refer  to  medium-sized  consumers  and 
provide an insight into affordability 
(2)  For  households,  the  consumption  bands  are  D2  for  gas 
and DC for electricity 
(3)  Industry  prices  are  shown  without  VAT  and  other 
recoverable  taxes/levies/fees  as  non-household  consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

thanks 

Energy prices have not affected international 
competitiveness.  Also 
to  subsidies, 
electricity  prices  for  non-household  consumers 
have  remained  below the levels  in the  US,  Japan, 
and  the  UK.  This  suggests  that  international 
competitiveness  of  energy-intensive  industries  in 
Malta should not be adversely affected. 

This Annex (41) sets out Malta’s progress and 
in  accelerating  the  net-zero 
challenges 
energy  transition  while  bolstering  the  EU’s 
competitiveness 
energy 
sector (42). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plans (NECP) for 2030 (43). 

clean 

the 

in 

Unlike the prevailing trends witnessed across 
the  EU,  retail  energy  prices 
in  Malta 
continued  to  remain  stable  during  2023. 
Throughout 2023 Malta has maintained its energy 
and  fuel  price  stability  policy,  which  had  been 
introduced  in  2020  to  protect  households  and 
businesses,  resulting  in  significantly  lower  prices 
than the EU average.  

Regulated below-cost retail electricity tariffs 
for  households  and  small  businesses  were 
maintained  during  2023  and  continued  to 
shield  consumers  from  energy  price  shocks. 
However,  such  universal  below-cost  tariffs  distort 
incentives to reduce energy demand and invest in 
energy  efficiency  measures,  and  they  impact 
heavily on public finance.   

Malta is a geographically isolated island with 
high  import  dependency  due  to  the  lack  of 
domestic  conventional  energy  sources  and 
relatively  limited  onshore  renewable  energy 
resource potential. Natural gas in Malta is used 
solely  for  the  generation  of  electricity  and 
currently  constitutes  the  largest  share  of  Malta’s 
electricity  generation  mix  at  approximately 
70%. (44)  Malta  is  not  connected  to  the  trans-
European  gas  network  and  is  not  dependent  on 
gas  imports  from  Russia.  Malta  does  not  operate 
any  underground  gas  storage  facility  and  is 
exempted  from  the  regulation  on  gas  storage. 

(41)  It is complemented by Annex 6 as the European Green Deal 

focuses on the clean energy transition and by Annex 8 on the 
action taken to protect the most vulnerable groups, 
complementing ongoing efforts under the European Green 
Deal, REPowerEU and European Green Deal Industrial Plan. 

(42)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act 

(43)  Malta submitted its draft updated NECP in October 2023. 

The  Commission issued an assessment and country-specific 
recommendations on 18 December 2023. Commission 
Recommendation, Assessment (SWD) and Factsheet of the 
draft updated National Energy and Climate Plan of Malta - 
European Commission (europa.eu) 

(44)  Eurostat. 

36 

0.000.050.100.150.200.250.300.35€/KWhElectricity (industry & service) - MTElectricity (industry & service) - EUElectricity (households) - MTElectricity (households) - EU 
 
 
   
  
 
Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

to 

(1) For Eurostat data (EU and MT), the band consumption is ID 
referring 
large-sized  consumers  with  an  annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and gives an 
insight into international competitiveness 
(2) JP = Japan 
Source: Eurostat, IEA 

solar 

capacity 

Installed 
from 
energy 
photovoltaics increased by 4% in 2023. Total 
renewable energy capacity in Malta in 2023 stood 
at  234  MW,  while  the  wind  capacity  in  Malta  is 
zero  MW. (45)  As  regards  the  acceleration  of  solar 
deployment,  the  largest  contributor  to  renewable 
electricity, no new policies with a legal basis were 
identified  besides  the  ongoing  PV  grant  schemes 
and  feed-in  tariff  schemes,  but  a  reform  was 
committed  to  under  REPowerEU  to  speed  up  the 
permitting  process  and  require  the  installation  of 
PVs on certain rooftops. Malta is in the process of 
finalising  an  offshore  renewable energy  policy 
which  will  provide  a  framework  for deploying 
renewables in its exclusive economic zone, yet no 
concrete  measures have  so  far  been  identified.  In 
September  2023,  Malta  conducted  a  public 
consultation  on  a National  Policy 
the 
Deployment  of  Offshore Renewable  Energy,  with 
the  aim  of  establishing  possible  suitable  marine 
areas  for  the  development  of  floating  offshore 
energy.  The  only  available  indicative  offshore 
renewable  energy  targets  for  Malta  (0.05  GW  for 
2030 and 0.4 GW for 2040 and 2050), are those 
included in the non-binding agreement defined by 
the  non-binding  goals  in the  2023  EU  Sea  Basins 
agreements.  

for 

Malta’s  relatively  high  share  of  renewables 
in  heating  and  cooling  (38%  in  2022)  is  in 
large part attributable to renewable cooling, 

(45)  IRENA Report 2024 

37 

with  heat  pumps  contributing  14  percentage 
points  (pps)  to  this  share.  Malta  states  in  its 
NECP  that  government  subsidies  for  heating  and 
cooling  through  heat  pumps  are  not  to  be 
expected,  due  to  this  technology  being  the 
predominant form of spatial  cooling. Heat pumps, 
however,  may  only  account  towards  a  Member 
State’s  heating  and  cooling  target  up to  a  certain 
maximum.  Relying  solely  on  heat  pumps, 
therefore, will not be enough to reach their sector-
specific heating and cooling target.   

Graph A7.3: Malta's installed renewable capacity 
(left) and electricity generation mix (right) 

(1) "Other" includes biogas 
Source: IRENA, Ember 

In  2021  the  overall  electricity  generated 
from  biogas  from  waste  in  Malta  was  7.23 
GWh,  amounting  to  nearly  0.27%  of  the 
overall  electricity  generated.  According  to  the 
draft  NECP,  these  figures  will  increase  after  the 
commissioning of the Cohesion Fund’s investment 
in a new organic processing plant, expected to be 
completed  by  2027.  The  plant  will  treat  a 
maximum  74 000  tonnes  per  annum  of  organic 
waste from households and companies, converting 
them  into  compost  and  biogas.  At  an  estimated 
120 normal cubic metres per tonne of waste input, 
this  will  generate  20.98  GWh/y  in  electricity  and 
19.75  GWh/y  in  heat,  when  working  at  full 
capacity.  

features  of 

Consumer  empowerment  in  the  electricity 
market  has  not  progressed,  due  to  the 
specific 
the  market.  The 
electricity  supply  market  in  Malta  remains 
the  exclusive 
closed,  with  Enemalta  being 
electricity  supplier  on  the  island.  As  regards 
consumer  empowerment  rules  and  tools,  92%  of 
final  household  consumers  had  smart  meters 
2022  (EU  average  80%),  but  the  lack  of  a  liquid 
wholesale  market  prevented  the  liberalisation  of 
the electricity market, as well as the development 
of a demand-side response or further aggregation 

050100150200250Index ( 2018 S2 = 100)JPUKUSMTEU 
  
 
 
islands,  integration  of  renewable  electricity,  and 
energy efficient solutions.  

Malta  maintains  low  investment  levels  in 
research  and  innovation  (R&I)  to  support 
Energy  Union  priorities.  Malta  is  a  moderate 
innovator,  according 
the  2023  European 
to 
Innovation  Scoreboard (46),  with  an  overall 
performance  index  at  85.8%  of  the  EU  average. 
The main relative weaknesses affecting the overall 
performance  refer  to  the  low  expenditure  in  R&I, 
both  in  terms  of  public  and  private  funding.  This 
general  picture also applies to the R&I supporting 
the  EU  energy  union  priorities.  Thus,  public  R&I 
investment (47)  remains  low  (0.8  M  EUR  in  2020 
and  0.9  M  EUR  in  2021),  despite  a  relative 
increase  compared  to  previous  years  (an  average 
of  0.4  M  EUR  between  2017  and  2019  inclusive). 
The  current  level  represents  only  a  0.006%  share 
of 
the  country’s  GDP.  The  support  mostly 
addresses  renewables  and  energy  efficiency.  At 
the same time, private R&I investment was around 
EUR  11  million  in  2020  (i.e.  roughly  one  order  of 
magnitude  higher).  The  topics  supported  covered 
energy  efficiency  in  industry,  smart  solutions  for 
consumers,  smart  and  integrated  energy  systems 
and  e-mobility  and  batteries.  The  number  of 
patent 
clean 
technologies  was  two,  representing  around  3.4 
patent families per million inhabitants, which is six 
times less than the EU average.  

in  2019 

families 

filed 

for 

measures.  Nevertheless,  time-of-use  tariffs  are 
available for EV charging and large non-residential 
consumers.  

Energy  efficiency  gains  slowed  down 
in 
is  still  untapped 
Malta,  although  there 
potential  on  energy  efficiency.  In  2022,  Malta 
had a primary energy consumption of 0.9 Mtoe, a 
15.5% increase over 2021, and an 8.7% decrease 
over  2012.  It  had  a  final  energy  consumption  of 
0.7  Mtoe,  a  19.3%  increase  over  2021  and  a 
37.8%  increase  over  2012.  The  increase  can 
partially  be  explained  from  recovery  from  Covid-
19.  In  2022,  the  largest  increase  came  from  the 
transport  sector,  which  increased  its  final  energy 
consumption by 29.3%. 

Malta  has  implemented  a  series  of  energy 
efficiency  measures  with  support  from  EU 
funds.  However,  most  of  the  schemes  are 
addressed  at  buildings  and  leverage  from 
other  funding  sources 
is  rather  limited. 
Although  Malta  did  not  add  energy  efficiency 
investment  in  its  REPowerEU  Chapter,  it  has 
invested  EUR  52.2  million  in  energy  efficiency  in 
its  Recovery  and  Resilience  Plan  (RRP),  and  the 
plan remains one of the greenest among Member 
States.  Under  cohesion  policy,  EUR  6  million  are 
financial 
allocated 
instruments,  energy  efficiency 
in 
companies  and buildings, with  a  specific  focus  on 
the  worst  performing  buildings.  Most  of  the 
schemes on energy efficiency are still grant-based 
and  the  use  of  financial  instruments  is  still  very 
limited.  In  terms  of  existing  funding  schemes 
addressing  mobilisation  of  investments  in  energy 
efficiency,  Malta  mainly  relies  on  grant-based 
funding schemes.  

investments 

support, 

through 

to 

a 

plans 

hydrogen-ready 

gas 
Malta 
interconnector  with  Italy,  ready  to  transmit 
100% hydrogen from its commissioning date, 
which benefits from an exemption under Article 24 
of the TEN-E Regulation and will continue to be a 
project  of  common  interest  in  the  first  Union  list 
under the revised Regulation.  

Malta  does  not  have  a  manufacturing 
capacity  for  clean  technologies  and  remains 
dependent  on  imports  for  renewable  energy 
deployment.  However,  Malta’s  National  Strategy 
for  R&I  in  Energy  and  Water  2021–2030,  as  well 
as  its  first  NECP,  endeavour  to  support  R&I 
initiatives  related  to  renewable  solutions  for 

(46)  European Innovation scoreboard  

(47)  Source: JRC SETIS (2023) 

38 

 
   
 
Table A7.1:  Key Energy Indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

39 

20192020202120222019202020212022Import Dependency [%] 97.3%97.6%97.1%99.0%60.5%57.5%55.5%62.5%of Solid fossil fuels 0.0%0.0%0.0%0.0%43.3%35.8%37.3%45.8%of Oil and petroleum products 97.8%99.3%97.9%100.7%96.7%96.8%91.7%97.7%of Natural Gas 103.6%96.2%103.5%100.2%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 0.0%0.0%0.0%0.0%39.7%41.3%41.1%21.0%of Crude Oil0.0%0.0%0.0%0.0%28.8%26.7%26.4%19.5%of Hard Coal0.0%0.0%0.0%0.0%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)-                   0.3                   0.3                   0.4                 0.4                 0.4                 0.4                 Gas Consumption year-on-year change [%]-                   -                   20.5%6.1%3.5%-0.2%1.6%Gas Imports - by type (in bcm)-                   0.3                   0.4                   0.4                 0.4                 0.4                 0.4                 Gas imports - pipeline-                   -                   -                   -                 -                 -                 -                 Gas imports - LNG0.00.30.40.40.40.40.4                 Gas Imports - by main source supplier (in bcm) (1)Trinidad and Tobago-                   0.2                   0.1                   0.3                 0.3                 0.3                 0.3                 United States-                   0.0                   0.1                   0.0                 0.1                 0.1                 0.1                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals1                      1                      1                      1                    1                    LNG Storage capacity (m3 LNG)125,000          125,000          125,000          125,000        125,000        Underground StorageNumber of storage facilities00000Technical Capacity (bcm)0.00.00.00.00.020162017201820192020202120222023Gross Electricity Production (GWh) (2)857                  1,652               1,962               2,060             2,143             2,215             2,293             -              Combustible Fuels7291,4891,7721,8641,9061,9592,004-              Nuclear0000000-              Hydro0000000-              Wind0000000-              Solar128162190195237256290-              Geothermal0000000-              Other Sources-0 -0 00-0 -0 -0 -              Gross Electricity Production [%]Combustible Fuels85.1%90.2%90.3%90.5%88.9%88.4%87.4%-              Nuclear0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Hydro0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Wind0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Solar14.9%9.8%9.7%9.5%11.1%11.5%12.6%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Net Imports of Electricity (GWh)1,527               861                  621                  636                416                511                639                -              As a % of electricity available for final consumption 72.1%37.1%26.0%25.7%17.5%20.4%23.7%-              Electricity Interconnection [%]-               24.2%29.4%29.0%31.0%44.5%42.3%40.9%Share of renewable energy consumption - by sector [%]Electricity5.7%6.8%7.7%7.5%9.5%9.6%10.1%-              Heating/cooling16.9%19.3%22.8%23.6%23.0%32.8%38.0%-              Transport5.3%6.8%8.0%8.9%10.6%10.5%10.5%-              Overall6.2%7.2%7.9%8.2%10.7%12.7%13.4%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)-               -               -               -              -              as a % of total VC investment (3) in Malta start-ups and scale-ups-               -               -               -              -              Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)0.3                0.8                0.9                -              -              Public R&I (% GDP)0.002%0.006%0.006%-              -              Private R&I (EUR mln)3.4                10.7             -               -              -              Private R&I (% GDP)0.024%0.081%-                   -                 -                 ELECTRICITY/ENERGYCLEAN ENERGYMaltaEUENERGY DEPENDNCEDIVERSIFICATION OF GAS SUPPLIES 
 
 
   
 
Table A7.1:  Key Energy Indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

40 

20192020202120222019202020212022Import Dependency [%] 97.3%97.6%97.1%99.0%60.5%57.5%55.5%62.5%of Solid fossil fuels 0.0%0.0%0.0%0.0%43.3%35.8%37.3%45.8%of Oil and petroleum products 97.8%99.3%97.9%100.7%96.7%96.8%91.7%97.7%of Natural Gas 103.6%96.2%103.5%100.2%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 0.0%0.0%0.0%0.0%39.7%41.3%41.1%21.0%of Crude Oil0.0%0.0%0.0%0.0%28.8%26.7%26.4%19.5%of Hard Coal0.0%0.0%0.0%0.0%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)-                   0.3                   0.3                   0.4                 0.4                 0.4                 0.4                 Gas Consumption year-on-year change [%]-                   -                   20.5%6.1%3.5%-0.2%1.6%Gas Imports - by type (in bcm)-                   0.3                   0.4                   0.4                 0.4                 0.4                 0.4                 Gas imports - pipeline-                   -                   -                   -                 -                 -                 -                 Gas imports - LNG0.00.30.40.40.40.40.4                 Gas Imports - by main source supplier (in bcm) (1)Trinidad and Tobago-                   0.2                   0.1                   0.3                 0.3                 0.3                 0.3                 United States-                   0.0                   0.1                   0.0                 0.1                 0.1                 0.1                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals1                      1                      1                      1                    1                    LNG Storage capacity (m3 LNG)125,000          125,000          125,000          125,000        125,000        Underground StorageNumber of storage facilities00000Technical Capacity (bcm)0.00.00.00.00.020162017201820192020202120222023Gross Electricity Production (GWh) (2)857                  1,652               1,962               2,060             2,143             2,215             2,293             -              Combustible Fuels7291,4891,7721,8641,9061,9592,004-              Nuclear0000000-              Hydro0000000-              Wind0000000-              Solar128162190195237256290-              Geothermal0000000-              Other Sources-0 -0 00-0 -0 -0 -              Gross Electricity Production [%]Combustible Fuels85.1%90.2%90.3%90.5%88.9%88.4%87.4%-              Nuclear0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Hydro0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Wind0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Solar14.9%9.8%9.7%9.5%11.1%11.5%12.6%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Net Imports of Electricity (GWh)1,527               861                  621                  636                416                511                639                -              As a % of electricity available for final consumption 72.1%37.1%26.0%25.7%17.5%20.4%23.7%-              Electricity Interconnection [%]-               24.2%29.4%29.0%31.0%44.5%42.3%40.9%Share of renewable energy consumption - by sector [%]Electricity5.7%6.8%7.7%7.5%9.5%9.6%10.1%-              Heating/cooling16.9%19.3%22.8%23.6%23.0%32.8%38.0%-              Transport5.3%6.8%8.0%8.9%10.6%10.5%10.5%-              Overall6.2%7.2%7.9%8.2%10.7%12.7%13.4%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)-               -               -               -              -              as a % of total VC investment (3) in Malta start-ups and scale-ups-               -               -               -              -              Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)0.3                0.8                0.9                -              -              Public R&I (% GDP)0.002%0.006%0.006%-              -              Private R&I (EUR mln)3.4                10.7             -               -              -              Private R&I (% GDP)0.024%0.081%-                   -                 -                 ELECTRICITY/ENERGYCLEAN ENERGYMaltaEUENERGY DEPENDNCEDIVERSIFICATION OF GAS SUPPLIES 
 
   
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

This  Annex  monitors  Malta’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
particularly  for  workers  and  households  in 
vulnerable situations. Malta’s green economy is 
expanding. Between 2015 and 2021, total  jobs in 
the environmental goods and services sector grew 
by 19.1% (to around 4 000) (EU: 18.2%), reaching 
1.5%  of  total  employment  (EU:  2.7%).  Also, 
between  2015  and  2022,  the  greenhouse  gas 
emission intensity of Malta’s workforce (see Graph 
A8.1  and  Table  A8.1)  declined  from  10.4  to  7 
tonnes  per  worker,  well  below  the  EU  average 
(14.3 tonnes per worker in 2022) (48), indicating a 
positive  trend  in  the  green  transition.  In  line  with 
the  Council  Recommendation  on  ensuring  a  fair 
transition  towards  climate  neutrality (49),  Malta’s 
national recovery and resilience plan (RRP) outlines 
reforms  and 
for  example: 
i) renovating public buildings such as hospitals and 
schools; ii) decarbonising and increasing access to 
public 
for 
purchasing  zero-emission  electric  vehicles  in  the 
private  sector;  and  iv) developing  green  skills  in 
the construction sector. These help implement the 
REPowerEU  plan,  and 
complement  actions 
supported  under  Cohesion  policy  funds,  including 
the installation of onshore power supply at Grand 
Harbour and Malta Freeport supported by the Just 
Transition  Fund,  as  well  as  actions  supported  by 
the European Social Fund Plus (ESF+). 

iii)  providing  support 

investments 

transport; 

in, 

and 

reskilling  workers 

Upskilling 
is 
instrumental  to  tackling  skills  shortages 
related  to  the  green  transition.  In  2023, 
employment in Malta’s energy-intensive industries 
represented 1.1% of total employment (EU: 3.5%). 
The  job  vacancy  rate  in  construction  (see  Graph 
A8.2), a key sector for the green transition, is lower 
than the EU average (3% vs 3.6% in EU in 2023). 
At  the  same  time,  82%  of  small  and  medium-
sized enterprises (SMEs) in the sector agreed that 
skills  shortages  are  holding  them  back  in  general 
business  activities  and  51%  think  that  the  skills 
required  for  greening  business  activities  are 

becoming  more  important  (EU:  42%) (50).  If  Malta 
matches  its  projected  contribution  to  the  EU’s 
2030  renewable  energy  target,  a  further  110 
skilled workers will be needed for the deployment 
of  wind  and  solar  energy,  which  may  require  an 
investment  in  skills  of  EUR  0.4-0.5  million. (51) 
Measures  under  the  Just  Transition  Plan  provide 
reskilling  and  upskilling  opportunities  for  workers 
affected by the transition, together with a broader 
training  offer  at  national  level  and  flexibility 
mechanisms to encourage in-company training. In 
Malta,  43%  of  ESF+  funding  contributes  to 
supporting quality and inclusive education, training 
and  lifelong  learning.  Several  programmes  co-
financed  by  the  ESF+  provide  upskilling  and 
reskilling 
training, 
guidance,  lifelong  learning,  etc.)  for  unemployed 
people  and  workers,  with  a  focus  on  green  and 
digital skills and jobs. 

opportunities 

(education, 

Graph A8.1: Fair transition challenges in Malta 

Source:  Eurostat,  EU  Labour  Force  Survey,  EMPL-JRC  GD-
AMEDI/AMEDI+ and DISCO(H) projects (see Table A8.1). 

Energy  poverty  indicators  in  Malta  have 
improved  in  recent  years.  The  share  of  the 
population unable to keep their homes adequately 
warm  decreased  from  14.1%  in  2015  to  7.6%  in 
2022,  below  the  EU  average  (9.3%) (52).  The 
indicator  decreased  by  0.2  percentage  points 
between  2021  and  2022,  despite  energy  price 
increases due to supply constraints caused by the  

(48)  Workforce-related calculations are based on the EU Labour 
Force Survey. Note, in the 2023 country report for Malta, 
such indicators were calculated based on employment 
statistics in the national accounts. This may result in limited 
comparability across the two reports.  

(49)  Council Recommendation of 16 June 2022 on ensuring a fair 
transition towards climate neutrality (2022/C 243/04) covers 
employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

(50)  Eurobarometer on skills shortages, recruitment, and retention 
strategies in small and medium-sized enterprises (Q4_1 and 
Q1_3). 

(51)  EMPL-JRC AMEDI+ project. 

(52)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub. 

41 

0.00.51.01.52.0Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEnergy povertyTransport poverty(proxy)Carbon inequalityMT Latest vs EU LatestEU LatestMT 2015 vs EU Latest 
 
 
   
 
 
Table A8.1:  Key indicators for a fair transition in Malta 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

pandemic  and  Russia’s  war  of  aggression  against 
Ukraine.  This  improvement  may  be  due  to  mostly 
untargeted  emergency  measures  implemented  in 
Malta (53). In particular, 14.1% of the population at 
risk  of  poverty  (AROP)  (EU:  20.1%)  and  10.3%  of 
lower  middle-income  households  (in  deciles  4-5) 
(EU:  11.6%)  were  affected  in  2022,  marking  a 
decline  since  2015  (from  27.4%  and  15.8%, 
respectively).  Malta  addresses  energy  poverty 
through  direct  income  and  universal  energy  price 
support measures, but also through more targeted 
structural  measures  such  as  energy  efficiency 
improvements,  support  for  roof-top  PVs  and 
advisory services for vulnerable customers. On the 
other  hand,  in  January  2023,  37.6%  of  the 
population at risk of poverty  spent a considerable 
proportion  of  their  budget  (more  than  6%)  on 
private transport fuels (EU: 37.1%) (54). 

the  EU  average, 
Despite  being  below 
environmental inequalities remain an issue in 
Malta.  In  2021,  the  average  carbon  footprint  for 
20% of the population with the highest income is 
1.4  times  higher  than  the  poorest  20% (55)  (EU: 
1.8).  For  both  groups,  the  carbon  footprint  is 
highest for food and mobility. The average level of 
air  pollution  in  2021  stood  slightly  above  the  EU 
average (11.6 vs 11.4 µg/m3 PM2.5), with most of 
the population living in regions exposed to critical 
levels (56).  This  has  significantly  impacted  health, 
in  particular,  in  vulnerable  groups,  and  caused 

(53)  See Box 1 in 2023 country report for Malta. 

(54)  Affordability of private transport fuels is one key dimension 

of transport poverty. The indicator has been developed in the 
context of the EMPL-JRC GD-AMEDI/AMEDI+ projects. 
Methodology explained in Economic and distributional effects 
of higher energy prices on households in the EU. 

(55)  Developed in the context of the EMPL-JRC DISCO(H) project. 
Methodology explained in Joint Research Centre, 2024. 
Carbon and environmental footprint inequality of household 
consumption in the EU. JRC137520. The EU average refers to 
EU27 without Italy (household income data not available for 
IT in the HBS) 

around  200  premature  deaths  annually (57). 
Malta’s  RRP  includes  measures  to  tackle  mobility 
challenges through decarbonisation and increased 
access to public transport. 

Graph A8.2: Job vacancy rate in transforming 
sectors and mining and quarrying 

B - Mining and quarrying 
C – Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E  -  Water  supply;  sewerage,  waste  management  and 
remediation activities 
F – Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

Malta  is  taking  steps  for  fair  transition 
towards  climate  neutrality  in  the  context  of 
the  Council  Recommendation  of  June  2022. 
Malta  has  implemented  specific  projects  which 
focus  on  skills  development  for 
the  green 
transition.  Cohesion  policy  funds  and  the  RRP  are 
used  for  promoting  entrepreneurship  in,  among 
others, the green sectors. The Malta Development 
Bank 
investments 
businesses  with 
supporting  the  clean  energy  transition.  Further 
action 
is  needed  to  address  the  challenges 
emerging  from  the  green  transition,  such  as 
tailored  job-search  facilities  and  a  comprehensive 
strategy on green skills development (58). 

helps 

(57)  EEA- Air Quality Health Risk Assessment 

(58)  Based on the monitoring review of the Council 

(56)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3). 

Recommendation on ensuring a fair transition towards 
climate neutrality, which took place in October 2023. 

42 

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%BCDEFEU 2023MT 2023MT 2017IndicatorDescriptionMT 2015MTEUGHG per workerGreenhouse gas emissions per worker – CO2 equivalent tonnes10.47.0 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24) and automotive (C29)1.3%1.1% (2023)3.5% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm14.1%7.6% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport38.4%37.6% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution1.41.4 (2021)2.7 (2021) 
 
     
 
 
   
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
Malta’s 
essential 
competitiveness (59).  The  priority  for  Malta  is 
waste management. 

circularity, 

boost 

to 

improve  waste 
prevention.  

collection, 

treatment, 

and 

Graph A9.1: ETS emissions by sector since 2013 

Malta  is  progressing  in  its  transition  to  the 
circular  economy.  Between  2018  and  2022, 
Malta’s  circular  material  use  rate  increased  from 
8.3%  to  15.1%,  against  an  EU  average  of  11.5%. 
Resource productivity has also grown and stood at 
3.3  purchasing  power  standards  per  kilogram  in 
2022,  exceeding  the  EU  average. 
Improving 
resource  productivity  can  help  minimise  negative 
impacts  on 
reduce 
dependence  on  volatile  raw  material  markets. 
Malta  relies  on  imports  more  than  other  EU 
countries, making the country comparatively more 
vulnerable to supply chain disruptions. In 2022, its 
material  import  dependence  stood  at  68.3%  (EU 
average:  22.4%).  Furthermore,  the  manufacturing 
sector  accounted  for  2.4%  of  water  abstracted  in 
2019.   

the  environment  and 

Source: European Commission 

Disregarding  air  transport,  all  of  Malta’s 
greenhouse gas emissions covered by the EU 
emissions  trading  system  (ETS) (60)  come 
from  power  generation.  Malta’s  power  sector 
registered significant greenhouse gas reductions in 
2013-2018, by 59%, but its emissions have been 
slightly  increasing  thereafter.  In  2023,  Malta’s 
greenhouse gas emissions from power generation 
were 8% above 2018 levels.   

reduction 

Waste  management  in  Malta  continues  to 
rely heavily on landfilling. The country failed to 
meet  the  EU  2020  municipal  waste  recycling 
target  and  is  on  course  to  miss  the  2025 
municipal  waste  and  packaging  waste  recycling 
targets,  as  well  as  the  2035  municipal  waste 
landfilling 
target.  Municipal  waste 
recycling accounted for 13.6% in 2021, one of the 
lowest  rates  in  the  EU.    The  plastic  packaging 
recycling  rate  is  below  the  EU  average,  but  is 
increasing, reaching 20.5% in 2021. Malta remains 
highly  dependent  on  landfilling  activities,  risking 
not achieving the target of a maximum of 10% of 
municipal  waste  landfilling  by  2035.  Malta  is  in 
the  process  of  building  a  waste-to-energy  plant 
with  a  capacity  of  192,000  tonnes  per  year.  The 
rate  has  dramatically 
packaging 
decreased  over  the  past  decade  and  stood  at 
38.4%  in  2021(EU  average:    64%).  Malta  did  not 
register any new patents on waste and recycling in 
2020.  Malta’s  national  energy  and  climate  plan 
does not extensively address the role of circularity 
in  the  decarbonisation  of  economy.  The  plan 
addresses  emissions  from  waste  and  the  need to 

recycling 

in 

2017 

There is still room for limiting the industry’s 
impacts  on  the  environment.  The  grams  of 
PM2.5  emitted  per  economic  output  (EUR’10) (61) 
decreased  from  0.02  in  2017  to  0.01  in  2020, 
versus  an  EU  average  of  0.07 grams/EUR’10  in 
2020. A similar trend was reported for PM10, with 
0.03 grams/EUR’10 
and 
0.02 grams/EUR’10 in 2020, versus an EU average 
of  0.10 grams/EUR’10  in  2020.  Moreover,  during 
the last decade, Malta has decreased its industrial 
emissions  into  the  air  of  the  main  pollutants 
except for PM10, the trend which does not show a 
consistent  decrease  over  time.  However,  nitrogen 
and  phosphorous  emissions  into  water  increased 
between  2010  and  2019.    The  country  produced 
81 kg  of  hazardous  waste  per  capita  and  treated 
only  1.2%  of  it.  Malta  suffers  from  lack  of 
economies of scale and land availability making it 
unfeasible  to  develop  a  full  array  of  treatment 
solutions  for  all  hazardous  waste.  The  country  is 
dependent  on  exports  of  hazardous  waste.  Such 

(60)  This analysis excludes air travel.  For more details and the 
data sources, see Weitzel, M; van der Vorst, C. (2024), 
Uneven progress in reducing emissions in the EU ETS, JRC 
Science for policy brief, JRC138215, Joint Research Centre. 

(59)  See also Annexes 6, 7 and 12. 

(61)  In 2010 prices. 

43 

00.20.40.60.810.00.20.40.60.81.01.21.41.620132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherMalta (both axes) 
 
 
 
  
 
 
demolition waste. The proportion of backfilling has 
remained well above the EU average of 9.9% and 
stood  at  56%  in  2020.  There  is  room  to  use  the 
building  stock  more  efficiently.  The  residential 
floor area per capita was below the EU average in 
2020, 28.8 m2, versus 36.5 m2 and has decreased 
over time. A similar trend can be observed for the 
non-residential floor area. 

High  levels  of  soil  sealing  and  limited  green 
areas  in  urban  environments  reduce  Malta’s 
resilience  to  heat  waves.  In  2018,  Malta  held 
the worst soil sealing record in the EU with a total 
19.4%  of  the  total  country  area  (2.23%  EU 
average).  In  the  2012-2018  period,  the  net  land 
take  increased  by  5  times  since  the  previous 
2006-2012  period,  faster  than  the  population 
growth.  The  8th  Environment  Action  Programme 
objective  of  managing 
land  sustainably  and 
reaching no net land take by 2050 should be duly 
observed. Land take mostly occurs in urban areas 
and  their  commuting  zones,  where  arable  land  is 
the  most  affected.  Malta  had  the  second-highest 
levels of land recycling and densification in the EU, 
44%  (EU  average:  13.5%),  in  2006-2012.  Green 
infrastructure is key in mitigating extreme climate 
events,  such  as  heat  waves.  The  2012-2020 
National  Biodiversity  Strategy  and  Action  Plan 
infrastructure  and 
explicitly  addresses  green 
connectivity, as well as the national environmental 
policy.  In  Malta’s  main  city  the  average  tree 
coverage only reached 6.6% in 2018 (EU average: 
30.3%).  

exports  are  mostly  directed  to  other  Member 
States.  74%  of  the  exported  hazardous  waste  in 
2022 was exported  for recovery. According to the 
assessment  of  data  in  the  12th  Urban  Waste 
Water  Treatment  Directive  implementation  report, 
in  2020,  Malta  presented  full  compliance  at  the 
collection  level,  but  very  low  compliance  for 
treatment,  around  6%  for  secondary  and  0%  for 
tertiary  treatment.  The  distance  to  the  EU  target 
was 94% in 2020.  

Graph A9.2: Treatment of municipal waste 

Source: Eurostat 

The  built  environment  system 
remains 
critical as construction grows at a rapid rate. 
This  is  causing  major  environmental  challenges 
such  as  land  sealing,  environmental  impacts  and 
increasing  construction  and  demolition  waste.  
Malta  has  taken  steps  to  counteract  the  situation 
by  making  the  building  regulator  operational  and 
by  adopting  a  strategy  for  construction  and 

Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

44 

672697643611618010020030040050060070020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)2.42.72.32.73.3-2.52022Circular material use rate (%)8.312.816.512.815.1-11.52022Eco-innovation index (2013=100)93.579.879.278.879.8-121.52022Recycling of plastic packaging (%)11.115.410.220.5--40.72021Cost of air emissions from industry (EUR bn)0.00.1----352.72021Built environmentRecovery rate from construction and demolition waste (%)100.0-100.098.4--89.02020Soil sealing index (base year = 2006)104.6-----103.42018Non-residential floor area (m2 per capita)8.68.48.2---18.02020Waste backfilled (%)77.7-62.1-42.0-9.92020 
          
 
 
          
 
ANNEX 10: DIGITAL TRANSFORMATION 

its 

for 

targets 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  policy  programme  and,  in 
particular,  with 
digital 
transformation  by  2030,  this  Annex  describes 
Malta’s  performance  on  digital  skills,  digital 
infrastructure/connectivity and the digitalisation of 
businesses  and  public  services.  Where  relevant,  it 
makes reference to progress on implementing the 
recovery and resilience plan (RRP). Malta allocates 
26%  of  its  total  Recovery  and  Resilience  Facility 
budget  to  digital  (EUR 67.6 million) (62).  Under 
cohesion  policy,  an  additional  EUR 129 million 
(17%  of  the  country’s  total  cohesion  policy 
funding)  is  allocated  to  the  country’s  digital 
transformation (63). 

The  Digital  Decade  policy  programme  sets 
out a pathway for the EU’s successful digital 
transformation  by  2030.  Malta’s  national 
roadmap outlines the actions it intends to take to 
reach the objectives and targets at national  level. 
The first report on the state of the Digital Decade 
highlighted the need to accelerate and deepen the 
collective efforts to reach the EU-wide targets and 
objectives (64).  Through  this,  a  digitally  skilled 
population 
the  development  and 
adoption  of  digital  technologies  and  leads  to 
productivity  gains  and  new  business  models.  It 
also  leads  to  higher  inclusion  and  participation  in 
an environment increasingly shaped by the digital 
transformation (65). 
technologies, 
infrastructure  and  tools  all  play  a  role 
in 
addressing 
the  current  structural  challenges, 
including  strategic  dependence  in  various  areas, 
cybersecurity and climate change.  

increases 

Digital 

(62)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII to the 
Recovery and Resilience Facility Regulation. 

(63)  This amount includes all investment specifically aimed at or 
substantially contributing to digital transformation in the 
2021-2027 cohesion policy programming period. The source 
funds are the European Regional Development Fund, the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(64)  European Commission (2023): Report on the state of the 

Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(65)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org) and OECD (2019): Going Digital: 
Shaping Policies, Improving Lives – Summary, 
https://www.oecd.org/digital/going-digital-synthesis-
summary.pdf. 

Malta  performs  above  the  EU  average  on 
digital  skills,  but  shortages  in  the  labour 
market  persist.  At  4.7%,  the  percentage  of  ICT 
specialists  in  the  Maltese  workforce  is  slightly 
the  EU  average.  Moreover,  69%  of 
below 
enterprises  report  hard-to-fill  vacancies  for  jobs 
requiring 
ICT  specialist  skills,  above  the  EU 
average  of  63% (66).  As  part  of  its  RRP,  Malta 
launched a scholarship scheme in 2021 to support 
intelligence, 
students 
studying 
cybersecurity,  data  science  and 
information 
studies,  among  others.  There  is  room  for  more 
targeted  measures  to  ensure  that  skilled  talent 
can  support  the  increasing  uptake  of  advanced 
technologies  and  facilitate  more  research  and 
innovation by Maltese enterprises. 

artificial 

fibre 

performance 

coverage 
Progress  on  5G  and 
strengthens  Malta’s 
on 
connectivity. Since 2019, all Maltese households 
have  had  access  to  very  high  capacity  networks 
(VHCNs) offering speeds of 1 Gbps and more. Fibre 
to  the  premises  (FTTP)  coverage  reached  70%, 
surpassing the EU average of 64% in 2023. Malta 
achieved nationwide overall 5G coverage in 2022, 
but  there  is  room  for  improving  coverage  on 
essential bands for enabling advanced applications 
requiring  large  spectrum  bandwidth.  5G  coverage 
on  the  3.4-3.8 GHz  pioneer  spectrum  band  stood 
at  25%,  significantly  below  the  EU  average  of 
41%.  While  spectrum  on  all  three  5G  pioneer 
bands  was  made  available  in  2021,  Malta  has  to 
date  not  assigned  spectrum  on  the  700 MHz  and 
26 GHz  bands  due  to  lack  of  market  interest, 
pointing to the small size of the country’s territory 
and market. 

cloud 

Maltese  enterprises,  including  SMEs,  have  a 
high 
level  of  digitalisation.  The  use  of 
advanced digital technologies is significantly more 
widespread among enterprises in Malta than in the 
EU  overall;  specifically  the  use  of  big  data 
analytics, 
artificial 
intelligence  is  above  EU  average.  If  we  consider 
the  indicator  ‘AI  or  cloud  or  big  data’,  measuring 
the  percentage  of  Maltese  enterprises  that  have 
taken  up  one  or  more  of  AI,  cloud  or  big  data,  in 
line  with  their  business  operations,  Malta  is  well 
above  the  EU  average 
(68%  versus  55%). 
However, there is  still  room  for  SMEs  to  catch  up 

computing 

and 

(66)  Eurostat: ICT specialists - statistics on hard-to-fill vacancies 
in enterprises (as % of enterprises which recruited / tried to 
recruit ICT specialists), 2022.  

45 

 
 
 
 
 
staff  across  departments,  including  outpatient 
departments. 

with  their  larger  peers.  The  Maltese  RRP  supports 
investments  in  the  digitalisation  of  businesses 
with two grant schemes launched in 2022. One of 
these  is  specifically  designed  to  stimulate  the 
uptake  of  ICT  hardware  and  software  by  SMEs. 
Beyond  uptake,  there  are  ample  opportunities  for 
stronger  cooperation  between  the  public  sector, 
businesses  and  academia  to  strengthen  research 
and  innovation  in  emerging  digital  technologies. 
Malta’s  RRP  partly  addresses  this  challenge  with 
the  2021-2027  smart  specialisation  strategy 
adopted as part of it. The strategy identifies digital 
technologies (e.g. artificial intelligence, the Internet 
of Things, high performance computing, distributed 
ledger technologies) as one of six priority areas for 
investment  in  research  infrastructure.  Considering 
Malta’s  environmental  challenges,  there  is  an 
opportunity  to  invest  in  the  development  and  use 
of innovative digital technologies in support of the 
green  transition 
(e.g.  applications  to  support 
energy  efficiency,  water  management,  smart 
mobility,  etc.).  In  2022,  3.3%  of  enterprises  in 
Malta 
to 
cyberattacks  (e.g.  ransomware  attacks,  denial  of 
service  attacks).  Over  the  same  year,  26%  of 
enterprises  developed  or  reviewed  their 
ICT 
security policy within the previous 12 months. 

ICT  service  outage  due 

reported 

The 

Malta  is  a  leader  in  digital  public  services. 
Citizens  and  businesses  can  access  nearly  all 
public  services  online  through  the  government’s 
one-stop-shop  portal  servizz.gov.  Malta’s  RRP 
includes  several  investments  to  further  improve 
digital public services, such as artificial intelligence 
solutions  to  improve  the  user  experience  on 
servizz.gov and measures to strengthen the overall 
security  and  capacity  of  the  government’s  IT 
infrastructure. 
electronic 
country’s 
identification 
(eID)  scheme,  which  has  been 
notified  under  the  eIDAS  Regulation (67),  can  be 
used to log in to 91% of online public services (68), 
including  to  access  electronic  health  records.  For 
access to e-health records, Malta scores 88 out of 
100.  Related  to  Malta’s  need  for  digital  tools  to 
support  healthcare,  cohesion  policy  funds  are 
supporting  investments  for  the  digitalisation  of 
health  services  aiming  to  strengthen  synergies 
between  various  services  to  ensure  availability  of 
streamlined  and 
patient 
information for both patients and relevant medical 

easily  accessible 

(67)  Regulation (EU) No 910/2014. 

(68)  2022 eGovernment Benchmark. 

46 

 
 
Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 

(1) The 20 million target represents about 10% of total employment.  
(2) The fibre to the premises coverage indicator is included separately as its evolution will also be monitored separately and taken 
into consideration when interpreting VHCN coverage data in the Digital Decade.   
(3) At least 75% of EU enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.  
Source: Digital Economy and Society Index 

47 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills61%61%63%56%80%% individuals20212021202320232030ICT specialists (1)4.8%5.0%4.7%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage100%100%100%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)48%56%70%64%-% households2021202220232023Overall 5G coverage20%100%100%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity73%NA77%58%90%% SMEs2021202320232030Data analyticsNANA36%33%-% enterprises20232023Cloud48%48%58%39%-% enterprises2021202120232023Artificial intelligence10%10%13%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA68%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens10010010079100Score (0 to 100)20212022202320232030Digital public services for businesses979710085100Score (0 to 100)20212022202320232030Access to e-health recordsNA788879100Score (0 to 100)2022202320232030Malta 
 
      
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  Malta’s  research  and 
innovation  system,  which 
is  essential  for 
delivering  the  twin  transition  and  ensuring  long-
term competitiveness. 

Graph A11.1: Public expenditure on R&D as a % of 
GDP 

Malta is a ‘moderate innovator’, but the gap 
between its performance and the EU average 
is  narrowing.  According  to  the  2023  edition  of 
the  European 
its 
innovation  performance 
increased  by  10.9 
percentage  points  since  2016,  at  a  higher  rate 
its  overall 
than  the  EU’s 
performance  remains  below  the  EU  average 
(85.8% of the EU performance). 

Innovation  Scoreboard (69), 

(8.5pp).  However, 

Total  R&D  intensity  remains  very  modest 
(0.69%  in  2022  against  an  EU  average  of 
2.24%) and it is lower than 10 years ago (70), 
with  weak  public  expenditure  that  continues 
to  hamper  the  R&I  potential  of  the  country. 
Public investment in R&D has been stagnant since 
2010  (and  remains  well  below  the  EU  average: 
0.23%  of  GDP  against  EU  average  of  0.73%  in 
2022), not mirroring the country’s significant GDP 
growth over the past few years. The need to build 
a  robust  R&I  enabling  framework,  sustained  also 
through  growing  investments  in  the  public  sector, 
is  acknowledged  in  Malta’s  national  research  and 
innovation  strategic  plan  2023-2027  which  was 
adopted  in  November  2023  and  builds  on  the 
outcomes  and  recommendations  of  the  Policy 
Support  Facility  (PSF)  peer  review  undertaken  in 
2019 (71). 

in 

and 

The  innovation  capacity  of  Maltese  firms 
remains  unexploited,  with  very  low  private 
investment 
companies 
R&D 
experiencing difficulties in accessing finance. 
Private  expenditure  in  R&D  is  significantly  below 
the  EU  average  (0.46%  of  GDP  against  the  EU 
average of 1.48%). The level of public support for 
business  R&D  is  one  of  the  lowest  in  the  EU  and 
has been decreasing over the years, declining from 
0.04% of GDP in 2010 to 0.01% in 2021. 

(69)  2023 European Innovation Scoreboard (EIS), country profile: 
Malta https://ec.europa.eu/assets/rtd/eis/2023/ec_rtd_eis-
country-profile-mt.pdf. The EIS provides a comparative 
analysis of innovation performance in EU countries, including 
the relative strengths and weaknesses of their national 
innovation systems (also compared to the EU average). 

(70)  Total R&D intensity was 0.80% of GDP in 2012. 

(71)  2019 peer review of the Maltese R&I system. 

48 

Source: Eurostat 

The same trend can be observed with respect 
the  availability  of  venture  capital 
to 
(0.005%72  in  2022,  down  from  0.010%  in 
2010,  and  well  below  the  EU  average  of 
0.085%).  According  to  the  European  Investment 
Fund, Malta is at the bottom of the EU ranking as 
regards  access  to  private  capital  and  funding  for 
SMEs (73).  The  country’s  technology  output 
is 
modest.  The  European 
Innovation  Scoreboard 
shows a negative performance compared to 2022 
enterprises 
and  medium-sized 
for 
small 
introducing 
process 
or 
product 
innovations. However, it is positive to observe that 
Malta’s patenting activity (number of patents filed 
under the Patent Cooperation Treaty) has been on 
an increasing trend over the last decade, although 
it  is  still  well  below  the  EU  average.  To  support 
companies’ innovation activities, as provided for in 
its  recovery  and  resilience  plan  (RRP),  the  country 
is  trying  to  streamline  and  simplify  the  funding 
landscape,  including  through  the  development  of 
common  account  management  within  Malta 
Enterprise  and  the  Malta  Council  for  Science  and 
Technology (MCST). 

business 

The lack of human resources has been widely 
acknowledged  by  the  private  and  public 
sectors  as  a  key  challenge  and  attracting 
and  retaining  talent  remain  an  urgent  need 
for  Malta.  According  to  a  new  Eurobarometer 
survey (74),  almost  two-thirds  of  businesses  in 
Malta say that their work is being held up because 
of  skills  shortages  in  the  labour  market.  Among 

(72) Venture capital (market statistics) as % of GDP. 

(73)  The 2022 EIF SME Access to finance Index. 

(74)  Report Flash Eurobarometer 529. 

00.10.20.30.40.50.60.70.820102015202020212022MT public investment on R&DEU average 
 
 
   
 
 
 
 
Table A11.1:Key innovation indicators 

(1) EU average for the last available year or the year with the largest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical Database), Invest EU 

them 

is  preventing 

the respondents, 87% of employers say that they 
have trouble recruiting staff for at least one role in 
their  company  and  over  half  say  that  the  lack  of 
skilled  workforce 
from 
investing  in  green  business  practices;  just  under 
half  say  they  are  struggling  to  adopt  digital 
technologies  in  their  business.  The  availability  of 
human resources for research and innovation is a 
major  concern.  The  number  of  new  graduates  in 
science  and  engineering  per  thousand  population 
aged  25-34  is  critically  low  and  continues  to 
decrease, falling to 5.2 in 2021, well below the EU 
average  of  16.9.  Moreover,  the  number  of 
researchers  employed  both  in  the  public  and 
private sector is very low. 

Further  efforts  are  needed  to  raise  the 
quality of Malta’s public science base and to 
enhance  academia-business  cooperation.  The 
good  degree  of  internationalisation  of  Malta’s 
research  system  is  visible  in  the  share  of  foreign 
doctoral 
significantly 
increased  in  recent  years,  as  well  as  in  terms  of 
international  co-publications (63.9% in 2022 as a 
percentage  of  the  total  number  of  publications, 
higher  than  the  EU  average  of  55.5%).  However, 
the  quality  of  Malta’s  scientific  output,  as 

students,  which  has 

49 

suggest 

increased 

that  Malta’s 

the  country’s 
the  share  of 
measured  by 
publications  among  the  top  10%  most-cited 
worldwide,  remains  below  average.  In  addition, 
indicators 
innovation 
ecosystem  is  fragmented  and  that  academia-
business  cooperation,  while  having  improved  over 
time,  is  still  facing  significant  challenges.  Public-
in 
private  scientific  co-publications 
recent  years  but  settled  at  7.6%  of  the  total 
number  of  publications. 
In  addition,  public 
expenditure  on  R&D  financed  by  businesses 
remains remarkably low and has been stagnant in 
the  past  decade  (0.003% in  2021  against  the  EU 
average  of  0.054%).  Stronger  science-business 
collaboration is needed to retain talent and foster 
the  valorisation  of  research  outputs.  The  need  to 
stimulate public-private partnerships is recognised 
also  in  the  national  research  and  innovation 
strategic  plan  2023-2027  and  was  already 
identified  as  a  priority  in  the  smart  specialisation 
strategy  2021-2027.  Various  measures  aimed  at 
knowledge 
strengthening 
transfer  across  academia  and 
industry  are 
supported  thanks  to  cohesion  funds,  including 
support for the setting up of a business incubation 
centre. 

collaboration 

and 

EU2022average (1)R&D intensity (GERD as % of GDP)0.590.720.650.650.692.24Public expenditure on R&D as % of GDP0.230.350.240.230.230.73Business enterprise expenditure on R&D (BERD) as % of GDP0.360.370.410.420.461.48Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 79.18.7::9.6Patent Cooperation Treaty (PCT)  patent applications per billion GDP (in PPS)0.711.89::3.4Public-private scientific co-publications as % of total publications5.25.36.27.57.67.6Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0030.0020.0040.003:0.054New graduates in science & engineering per thousand pop. aged 25-348.19.75.45.2:16.9Total public sector support for BERD as % of GDP0.040.0450.010.01:0.204R&D tax incentives: foregone revenues as % of GDP0.030.01900:0.104Share of environment-related patents in total patent applications filed under PCT (%)15.439.13.4::14.7Venture capital (market statistics) as % of GDP0.010.010.0060.0060.0050.085Employment share of high growth enterprises measured in employment (%)::19.36::12.51Malta2010201520202021Key indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation Finance for innovation and economic renewal 
 
   
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

(in 

Labour  productivity  continues  to  grow  at  a 
similar  pace  to  the  EU  average,  although 
sectorial differences are considerable. Labour 
productivity 
terms  of  GDP  per  person 
employed)  has  been  mainly  driven  by  high 
productivity  sectors 
like  manufacturing  and 
services  such  as  real  estate,  information  and 
communication,  gaming,  as  well  as  professional, 
Labour 
scientific 
productivity  growth  in  industry  reached  3.8%  in 
2023 (see Table A12.1) (75). 

technical 

services. 

and 

Graph A12.1: Real labour productivity (GDP per 
hour worked), by sector, 2015=100 

Source: European Commission 

encounter 

businesses 

Due  to  their  size  and  geographical  position, 
Maltese 
specific 
challenges in terms of price and supply chain 
developments.  Malta’s 
industrial  production 
capacity  relies  largely  on  machinery,  energy  and 
chemical  imports  from  EU  Member  States  and 
Asia. Price changes on the world market therefore 
affect  Maltese  businesses  directly.  The  energy 
price  is  currently  fixed  at  2020  levels,  and  the 
government  provides  subsidies  to  the  energy 
sector.  These  untargeted  subsidies  helped  to 
contain inflation to some extent, but place a heavy 
burden  on  the  government  budget,  reduce  the 
incentive  to  invest  in  energy  efficiency  measures, 
and  tend  to  benefit  higher  income  consumers (76). 
On  disruptions  to  international  trade,  Maltese 

firms  consider 
logistics  and 
‘Disruptions  of 
transport’  and  ‘Access  to  commodities  or  raw 
materials’  as  main  obstacles  (80%  and  74% 
respectively, vs EU averages of 65% and 62%) (77). 
Although  tensions  in  material  shortages  eased  in 
2023,  manufacturing  firms  report  shortages  in 
raw  materials  and  components  (24%  in  2023  vs 
17% in the EU) as their main production constraint 
(see  Table  A12.2).  Moreover,  50%  of  Malta’s 
international  companies  interviewed  by  Ernst  and 
Young cited supply chain concerns as weighing on 
situation (78).  These  external 
their 
dependencies  may  explain  Malta’s  continuously 
high  level  for  the  economic  uncertainty  indicator 
(EUI) (79) in 2023. 

financial 

face 

continues 

considerable 
to 
Malta 
shortages  of  skilled  workers  and  skills 
mismatches  across  sectors.  Availability  of 
skilled staff is the most cited long-term barrier to 
investment according to the EIB Investment Survey 
(93%  of  Maltese  firms  vs  EU  average  of  81%). 
Although the problem prevails across sectors, high 
value-added  service  sectors  such  as  financial 
information  and  communication  and 
services, 
gaming are particularly  affected. According to the 
Ernst  &  Young  Attractiveness  Survey,  foreign 
investors  claim  that  the  technical  skills  of  the 
workforce are one of the most important priorities 
when  choosing  an  investment  country.  Reported 
areas  of  future  technology 
investments  are 
artificial  intelligence,  intelligent  automation  and 
distributed  cloud.  While  foreign  investors  are 
successful 
their 
retaining  and 
workforce,  they  increasingly  find  it  difficult  to 
employ local staff (80). In addition, according to the 
Survey on access to finance of enterprises (SAFE), 
25%  of  small  and  medium-sized  enterprises 
(SMEs)  indicate  ‘availability  of  skilled  staff  or 
experienced  managers’  as  one  of  their  most 
pressing  concerns (81).  The  tight  Maltese  labour 

training 

in 

(77)  EIB Investment Survey (2023). 

(78)  EY Future of manufacturing 2022. 

(79)  The EUI is a composite indicator that shows how difficult it is 

for managers/consumers to predict the future 
business/financial situation. It is published regularly by the 
European Commission as part of its business and consumer 
surveys (https://economy-finance.ec.europa.eu/economic-
forecast-and-surveys/business-and-consumer-surveys_en). 

(75)  Malta The National Productivity Board (2022). Annual Report 

2022. 

(80)  Malta Attractiveness Survey 2023 – EY Malta. 
https://www.ey.com/en_mt/articles/19th-malta-
attractiveness-survey  

(76)  IMF (2023). Malta, selected issues, IMF Country Report No. 

23/79. 

(81)  European Commission (2023). Survey on access to finance 

of enterprises (SAFE), Analytical Report 2023. 

50 

6080100120140160180201520162017201820192020202120222023Industry (except construction)ConstructionWholesale and retail trade, transport, accommodation and foodservice activitiesInformation and communicationFinancial and insurance activities 
 
     
 
 
 
 
market situation is exacerbated by its geographical 
position and size. Employing more foreign workers 
has only partially eased the situation. 

Maltese  SMEs  would  benefit  from  easier 
access  to  finance,  especially  to  alternative 
financing and the use of equity. SMEs form the 
backbone  of  the  Maltese  economy  and  are  the 
to  economic  growth  and 
main  contributors 
employment.  In  2023,  their  value  added  grew  by 
12.8%  (13.1%  in  2022) (82).  According  to  the  EIB 
Investment  Survey,  Maltese  businesses  rely  to  a 
large  extent  on  internal  finance  (74%).  This  may 
be due to relatively high financing costs but is also 
related  to  difficulties  in  accessing  bank  lending 
due  to  the  small  market  size.  Furthermore,  the 
share  of  financially  restricted  firms  in  2023,  at 
11.2%,  remained  above  the  EU  average  of  6.1%. 
Meanwhile, domestic firms made no use of equity 
or  debt  securities (83).  Other  financing  channels 
such as business angels and crowdfunding remain 
unexploited.  Despite  some 
initiatives  by  the 
government. Malta’s venture capital investment as 
share  of GDP is  among the  lowest in  the  EU  (see 
Table A12.2).  

for 

services,  while 

Malta  is  well  integrated  into  the  single 
market 
certain 
trade 
restrictions  persist.  Malta’s  services 
integration represents 60% of GDP (84), the second 
highest  of  all  Member  States  and  much  higher 
than  the  EU  average  (14.9%).  Service  exports  are 
mainly  dominated  by  ‘other  business  services’, 
financial services and intellectual property charges 
(see  Graph  A12.2).  However,  the  weakening  of 
external demand from EU trading partners such as 
Germany  and  Italy  could  restrict  service  trade 
performance (85). 
In  contrast  to  service  trade 
integration,  Malta’s  trade  integration  in  the  single 
market  for  goods  (15%)  remains  below  the  EU 
average (28%) according to Eurostat.  

Graph A12.2: Shares of services exports 

(1) Trade in services – share in total world exports (%)  
Source: European Commission 

In  recent  years,  Malta  has  considerably 
improved in some key indicators (86) on public 
procurement.  The  reported  rate  of  single  bids 
(only  one  submitted  offer),  at  15%,  is  still  way 
below  the  EU  average  of  29%.  The  rate  of 
negotiated  procedures  without  publication,  at  1%, 
is also the lowest in the EU and well below the EU 
average of 5%. Malta ranks among the best in the 
EU  for  the  rate  of  contracts  awarded  to  SMEs 
(91%;  EU  average  62%)  and  the  rate  of  offers 
from SMEs (92%; EU average 73%).  

However,  the  Maltese  public  procurement 
system  still  faces  several  challenges.  The 
number  of  direct  awards  is  among  the  highest  in 
Malta  (13%  vs  EU  average  8%),  and  it  takes  a 
relatively  long  time  (163  days)  for  the  public 
authorities  to  reach  a  decision  on  a  tender  (EU 
average  91  days) (87).  The  rate  of  contracts 
awarded  based  on  the  lowest  price  is  87%,  well 
above the EU average rate of 66%. This indicates 
to  promote 
that  more  efforts  are  needed 
strategic/quality-related 
Indeed, 
Malta  has  taken  some  steps  to  promote  green 
procurement but is still in its early planning, while 
socially  responsible  and  innovation  procurement 
are  still  at  an  early  stage.  Lastly,  further  efforts 

procurement. 

(82)  Malta SME Factsheet (2023). 

(83)  EIB Investment Survey (2023). 

(84)  Measured as average value of imports and exports as a 

share of GDP (https://single-market-
scoreboard.ec.europa.eu/competitiveness/integration_en) 

(85)  European Commission (2024). European Economic Forecast, 

Spring 2024. 

(86)  The currently available data is preliminary. Due to the 

technical preparation of a new public procurement platform, 
only the regular data available in Tenders Electronic Daily 
(TED) has been taken into account. 

(87)  European Commission, Single Market Scoreboard, 

forthcoming. Country data: Malta | Single Market Scoreboard 
(europa.eu) 

51 

Transport4.67%Travel1.64%Construction0.04%Insurance and pension services1.20%Financial services20.93%Charges for the use of intellectual property n.i.e.10.04%Telecom., computer, & information serv.1.54%Research and development services0.06%Professional and management consulting services27.18%Technical, trade-related, and other business services28.58%Personal, cultural, and recreational services3.65%Goods-related services0.49%2021 
 
   
 
to 

fight  corruption 
A 

in  public 
are  needed 
Flash 
recent 
procurement  markets. 
Eurobarometer 
that  31%  of 
report  showed 
companies  in  Malta  think  that  corruption  has 
prevented them from winning a public tender or a 
public  procurement  contract  in  the  last  3  years. 
This is 5 percentage points above the EU average 
(26%) (88).  Business  associations  have  been 
collecting over 40 recommendations for improving 
the  current  process  and  are  calling  for  public 
procurement reform to rationalise public spending 
(value for money), increase transparency, planning 
capacity  and  accountability,  and  ensure  better 
access  for  firms (89).  In  addition,  the  OECD  has 
published a number of recommendations to tackle 
public procurement in the short, medium and long 
term (90). 

room  for 

Indicators  in  the  Single  Market  Scoreboard 
point to satisfactory performance in general, 
improvement  on 
with  some 
transposition  delays.  According  to  the  Single 
Market  Scoreboard,  Malta  remains  among  the 
best-performing  Member  States  in  transposing 
the 
in 
(0.6%  vs  0.7%  EU)  and 
directives 
correctness  of 
(conformity 
deficit),  which  is  0.4%  vs  1.2%  in  the  EU (91). 
(25.6 
However, 
months  vs  18.3 months in  the  EU),  which  hinders 
the  use  of  single  market  rules  for  Maltese 
businesses. Malta solved 90% of the SOLVIT cases 
(29)  it  handled  as  lead  centre,  above  the  EU 
average of 88.3% (92).  

transposition  delays 

transpositions 

remain 

its 

and  46%  in  the  EU).  Firms  encounter  several 
issues  and  delays  when  dealing  with  government 
services,  such  as  obtaining  certificates  and 
licences, setting up/closing businesses or using the 
interface  of  government  services.  Mobility  and 
connectivity  issues  as  well  as  insufficient  traffic 
management  affect  businesses  and  also  reduce 
the  attractiveness  of  the  economy  for  foreign 
investors (93). Malta’s road network faced net daily 
growth  of  58  vehicles  in  Q2-2023,  and  structural 
reform  seems  necessary (94). 
late 
payments were identified by 76% of SMEs (95) (up 
from  61%  in  2022)  as  a  pressing  problem, 
the  EU  average  of  49% (96). 
compared 
Investment under the recovery and resilience plan 
focuses  on 
in  public 
administration, public services, companies and the 
justice  system.  This  could  help  address  several 
issues,  especially  if  an  integrated  approach  is 
applied. 

improving  digitalisation 

In  2023, 

to 

Malta  completed  the  different  technical 
stages  by finalising  the  configuration  of the 
‘once-only’  technical  system  (OOTS) (97).  As 
part of the Single Digital Gateway Regulation  (98), 
the  system  will  enable  the  automated  cross-
border  exchange  of  evidence  between  competent 
authorities, improving online access to information, 
administrative  procedures  and  assistance  within 
the  EU.  The  onboarding  of  French  competent 
authorities  is  crucial  for  the  system  to  function 
smoothly and to reduce administrative burden. 

burden, 

barriers 

long-term 

such 
as 
Tackling 
transport 
administrative 
infrastructure  and  payment  delays  would 
improve  the  Maltese  business  environment 
further.  Business  regulation  and  infrastructure 
long-term  barriers  to 
are  among  the  main 
investment  cited  by  businesses  compared  to  the 
EU  average  (76%  and  72%  respectively,  vs  61% 

(88)  Eurobarometer 524 on Businesses’ attitudes towards 

corruption in the EU (2023). 

(89)  The Malta Chamber (2022). Recommendations for the 2023 

National Budget. 

(93)  In the EY Attractiveness Survey 2023, investors cite this as 
the second priority for the country to remain globally 
competitive. 

(94)  See also Annex 17, Economic and Social Performance at 

(90)  OECD (2023). Public Procurement in Malta: Building Capacity 

Regional level. 

and Managing Risks. 

(91)  European Commission, Single Market Scoreboard, 

forthcoming. Country data: Malta | Single Market Scoreboard 
(europa.eu) 

(95)  This is the highest share among all EU countries. 

(96)  Survey on access to finance of enterprises (SAFE), 2023. 

(97)  Regulation (EU) 2018/1724. 

(92)  Single Market Scoreboard – SOLVIT 

(98)  Implementing Regulation (EU) 2022/1463. 

52 

 
 
 
 
 
 
 
 
Table A12.1:Industry and the Single Market 

Source:  (1)  AMECO,  (2)  Eurostat,  (3)  Single  Market  Scoreboard,  (4)  OECD,  (5)  ECFIN  BCS,  (6)  COMEXT  and  Commission 
calculations, (7) EIB Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index.  
* Own Commission calculations for the EU27 average 

53 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP15,64,55,210,33,63,8Net Public investment, level of public capital stock, net of depreciation, % GDP11,41,521,11,51,2Real labour productivity per person in industry (% yoy)260,85,26,13,8-1,24Cost competitivenessNominal unit labour cost in industry (% yoy)2-1,4-2,71,7-1,4-0,79,83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP20,053,370,075,775,042,9Transposition deficit, % of all directives not transposed30,30,71,10,40,60,7Conformity deficit, % of all directives transposed incorrectly30,60,810,60,41,1SOLVIT, % resolution rate per country3100,091,793,886,790,088,3Number of pending infringement proceedings3162024191325,9RestrictionsEEA Services Trade Restrictiveness Index4-----0,05Single bids, % of total contractors313159151528,6Direct Awards, %31119138,1Material Shortage (industry), firms facing constraints, %53,19,047,341,524,017,2Labour Shortage using survey data (industry), firms facing constraints, %546,116,227,133,144,323,3Vacancy rate, % of vacant posts to all available ones (vacant + occupied)22,81,72,43,03,22,5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60,170,150,160,190,190,22Installed renewables electricity capacity, % of total electricity produced20,00,00,00,050Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle710,116,215,714,015,022,2Bankruptcies, Index (2015=100)2150,0100,0133,3100,0133,3105,6Business registrations, Index (2015=100)2101,897,1105,291,888,4120,2Payment gap - corporates B2B, difference in days between offered and actual payment8-----15Payment gap - public sector, difference in days between offered and actual payment8-----16Share of SMEs experiencing late payments in past 6 months, %971,573,864,460,976,048,7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100,740,550,450,77-0,49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 110 0,170,050,050,07-0,17ECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeMaltaHEADLINE INDICATORSEconomic StructureSINGLE MARKETCompliancePublic procurement  
 
 
 
   
 
54 

 
 
 
ANNEX 13: PUBLIC ADMINISTRATION 

Malta’s public administration is essential for 
providing  services  and  carrying  out  reforms. 
The  perceived  effectiveness  of  Malta’s  public 
administration is still below the EU average (Graph 
A13.1a). Malta’s recovery and resilience plan (RRP) 
aims  to  boost  the  public  administration's  digital 
transformation. This complements the 2021-2027 
digital  strategy,  which  aims  to  reduce  the  digital 
includes  significant 
divide.  The  updated  RRP 
reforms  to  strengthen  judicial  independence  and 
the  institutional  framework  to  help  in  the  fight 
against corruption and money laundering. 

Malta’s  digital  public  services  have  a  high 
level of maturity. However, there has only been 
some  improvement  to  facilitate  access  to  open 
data and to make use of it: the country scores the 
lowest in the EU (Graph A13.1b). Malta adopted a 
data strategy for public administration in 2023, to 
make public services more accessible  and aligned 
with  the  EU  Data  Governance  Act.  The  share  of 
users  of  government  websites  and  applications in 
Malta  is  above  the  EU  average  and  quickly  rising. 
Under  its  RRP,  Malta  is  actively  working  on,  for 
example,  improving  administrative  registers  and 
implementing  a  new  platform  for  data  sharing. 
Malta 
looking  to  better  the  public 
administration's  IT  environment  for  remote  work. 
Cohesion funds intend to support the development 
of  a  Digital  Transformation  Hub,  which  is  also  a 
testing  area  for  pilot 
initiatives  on  digital 
processes for the public service. 

is  also 

The  share  of  civil  servants  with  higher 
education in Malta is below EU average (Chart 
A13.1c).  However,  participation  in  adult  learning 
and  education  is  relatively  high  (Table  A13.1).  In 
2023,  Malta  launched  a  new  internship  policy  to 
modernise  and  standardise  the  use  of  interns 
across  the  public  service.  Guidance  is  provided  to 
managers,  supervisors,  and  public  officers  on 
working  with  interns.  Gender  parity  in  senior  civil 
service positions is increasing (Table A13.1). 

is  no 

Weaknesses in Maltese policymaking remain. 
There 
involving 
formal  process 
stakeholders (99),  especially  in  the  early  stages  of 
impacts  and  policy 
the  process.  Expected 
outcomes  are  not  evaluated  systematically.  To 
increase the use of evidence, some ministries have 
set up monitoring and evaluation units.   

for 

(99)  2023, Rule of Law Report. Country Chapter on the rule of law 

situation in Malta 

55 

The  management  of  public  investment  could 
be  improved  across  the  full  investment 
cycle (100).  Currently,  integrated  visions  outlining 
long-term  country  objectives  only  cover  selected 
sectors  or  policy  areas,  such  as  the  environment 
and  decarbonisation.  There  is  no  clear  monitoring 
process to ensure that these long-term objectives 
and subsequent action plans (e.g. the green public 
procurement  national  action  plan  for  2022-2027) 
or  sectoral  strategies  are  aligned  and  that  these 
objectives  are  achieved.  Investment  plans  of  5  to 
10  years  with  large  sectoral  coverage,  describing 
how public investment will contribute to achieving 
the  national  and  sectoral  strategies,  can  support 
implementation  of 
the 
effectiveness  of  how  they  are  planned.  Moreover, 
is  no  widespread  use  of  standardised 
there 
assessment methodologies for projects. 

the  strategies  and 

There  are  serious  concerns  about  the 
efficiency  of  the  justice  system.  For  instance, 
although  lower  than  in  2021,  the  estimated  time 
needed  to  resolve  administrative  cases  at  first 
instance is 1 081 days, which is the longest in the 
EU (though it improved compared to 2021, when it 
totalled  1356  days).  The  duration  of  litigious  civil 
and commercial cases at first instance in 2022 is 
still  very  long  (491  days  although  it  decreased 
from  529  days  in  2021).  The  clearance  rate  for 
civil,  commercial,  and  administrative  cases, 
showing how courts deal with caseloads, continued 
to  deteriorate in  2022,  remaining  below  100%  at 
around 87% against 89% in 2021. The quality of 
the  justice  system  is  overall  good.  However, 
resources  for  the  judiciary  are  still  a  concern,  in 
particular the low number of judges per inhabitant 
(third  lowest  in  the  EU,  despite  progress  made), 
the  lack  of  clerical  staff, as  well  as  limited  space 
available  in  terms  of  offices  and  courtrooms. 
justice  system  needs 
Digitalisation  of 
improvement. In this regard, a new national digital 
justice strategy for 2022-2027, partly financed by 
the Recovery and Resilience Facility, was adopted. 
It  aims  to  increase  the  use  of digital  tools by  the 
courts  and  tackle  other  digitalisation  gaps.  On 
judicial  independence,  no  systemic  deficiencies 
have been reported (101). 

the 

(100) Belu Manescu, C. (2022), ‘New evidence on the quality of 
public investment Management in the EU’, European 
Economy Discussion Paper No 177, European Commission. 

(101) For more details, see the 2024 EU Justice Scoreboard and 
the Commission’s 2024 Rule of Law Report (forthcoming). 

 
 
 
 
 
Table A13.1:Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2023 value. If unavailable, the latest value available is 
shown. (3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as 
the existence of key enablers for the provision of those services. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source:  E-government  activities  of  individuals  via  websites,  Eurostat  (#  1);  E-government  benchmark  report  (#  2);  Open  data 
maturity report (# 3); Labour Force Survey, Eurostat (# 4, 5, 7); European Institute for Gender Equality (# 6); Fiscal Governance 
Database (# 8, 9); OECD Indicators of Regulatory Policy and Governance (# 10). 

Efforts  could  be  made  to  strengthen  the 
independent fiscal institution. The Malta Fiscal 
Advisory Council is a medium-sized institution with 
a  relatively  narrow  mandate,  which  in  particular 

does  not  cover  policy  costing  and  sustainability 
analysis. Since 2015, its budget has been frozen in 
real terms by law. 

Graph A13.1: a) Government effectiveness, open government data and c) share of employees by 
education attainment level 

(1)  Chart a) Average value over 2018-2022 and change over 2018-2022. The GDP per head bar shows the mean value of the 
government  effectiveness  indicator  for  the  group  of  EU  countries  belonging  to  the  same  GDP  per  head  cluster  as  Malta  (EU 
countries are ranked in terms of their GDP per head and grouped into three equally sized clusters). 
Chart b) 2023 scores (in % of the total maximum score); Right-side chart: low values denote good performance. 
Chart c) 2023 data, 26-64 age brackets; High: education levels 5-8; medium (3-4): low (1-2). 
Source: a) Worldwide Governance Indicators; b) Open Data Maturity | data.europa.eu; Labour Force Survey (Eurostat). 

56 

MT20192020202120222023EU-27(2)1n/an/an/a83.088.075.02n/a96.395.595.796.975.830.40.50.50.40.50.8433.033.129.0 (b)31.135.652.9523.615.122.1 (b)22.520.917.9616.413.810.810.09.49.272.72.93.0 (b)2.92.51.580.70.70.70.7n/a0.791.31.31.31.3n/a1.410n/an/a1.44n/an/a1.7Medium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance2424.52525.52626.5270%10%20%30%40%50%60%70%80%90%100%PolicyQualityPortalImpactTotal201820192020202120222023Open data 2023Open data rankingb) Open government data MT2023EU-27MT-0.20.00.20.40.60.81.01.2MTEU-27GDP perhead clustera) Government effectivenessChange 2018-2022Average 2018-20220%10%20%30%40%50%60%70%80%90%100%MTEU27MTEU27MTEU27Publicadministration (O)Publicadministration,education andhealthcare O-QTotal economyc) Employees by education attainmentHighMediumLow 
 
 
   
 
   
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS 

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU.  This  Annex  provides  an  overview  of  Malta’s 
progress in implementing the Pillar’s 20 principles 
and the EU headline and national targets for 2030 
on employment, skills, and poverty reduction. 

Table A14.1:Social Scoreboard for Malta 

Update  of  23  April  2023.  Members  States  are  categorised 
based  on  the  Social  Scoreboard  according  to  a  methodology 
agreed  with  the  EMCO  and  SPC  Committees.  Please  consult 
the Annex of the Joint Employment Report 2024 for details on 
the methodology. 
Source: Eurostat 

The Maltese labour market is performing well 
but challenges for women and disadvantaged 
groups  remain.  Backed  by  robust  economic 
growth,  the  country  maintained  a  high  level  of 
employment,  81.7%  in  2023  (vs  EU  75.3%),  with 
very low numbers of unemployed and people who 
are  not  in  employment,  education  or  training 
(NEETs).  Nonetheless, 
face 
in  terms  of  access,  participation, 
challenges 
retention  of  employment  and  working  conditions. 
Despite  a  significant  drop  (-3.3 percentage  points 
(pps)), the gender employment gap remains one of 
the  widest  in  the  EU  (14.2 pps  vs  EU  10.2 pps,  in 
2023),  even  if  the  gender  pay  gap  is  narrower 
(10.2%  vs  EU  12.7%  in  2022).  In  2023,  the 
employment  rate  of  women  aged  55-64  was 

groups 

some 

particularly  low  (44.1%  vs  EU  58.1%  in  2023), 
contributing to a wide gender pension gap (45 pps 
vs  EU  26.1 pps  in  2022).  The  increasing  disability 
employment gap is 8.7 pps above the EU average 
and  only  half  of  the  persons  with  disabilities  of 
working age are active in the labour market. There 
are  high  levels  of  labour  shortages  and  skills 
mismatches,  with the  vacancy  rate  at  2.8%  2023 
(vs EU 2.7%), despite the high participation of non-
Maltese  nationals  in  the  labour  market.  While 
Malta  struggles  to  retain  EU  nationals,  workers 
from  non-EU  countries  often  face  poor  working 
conditions.  Their  residence  status  is  strictly  linked 
to  their  employment  contract,  which  makes  them 
highly  dependent  on  employers,  and  they  also 
have 
decent 
in 
accommodation (102).  The  European  Social  Fund 
Plus  (ESF+)  promotes  employment  and  activation 
measures,  especially  for  young  people,  women, 
non-EU  nationals,  older  workers  and  persons  with 
disabilities.  Reforms  under  the  recovery  and 
resilience  plan  (RRP)  target  older  workers,  in 
particular  women,  and  low-skilled  adults.  While 
further  efforts  are  needed,  these  measures  will 
help  reach  the  2030  national  employment  target 
of at least 84.6% of adults being employed. 

difficulties 

accessing 

Labour  shortages  and  skills  mismatches  in 
many  sectors,  poor  educational  outcomes, 
and  a  low  participation  in  learning  by  low-
skilled  adults  pose  several 
interlinked 
challenges.  While  the  early  school  leaving  rate 
has  steadily  decreased  (-0.9 pps  from  2021  to 
10.0%  in  2023),  it  remains  slightly  above  the  EU 
average  (9.5%)  and  feeds  a  large  pool  of  low-
skilled  adults  (15-64  age  group)  (33.1%  vs  EU 
24.9%,  in  2022).  More than  30%  of  15-year-olds 
lack basic skills (see Annex 15). Moreover, despite 
the  continued 
reskilling  and 
upskilling  of  the  adult  population,  there  are 
widespread  skills  shortages  in  key  areas,  such  as 
the green, digital, construction and manufacturing 
sectors (see Annex 8). 62% of businesses in Malta 
consider that their growth was being held back by 

investments 

in 

(102) See: Debono, M. (2021). Migrants and the challenge of 
decent work in Malta. e-Revista Internacional de la 
Protección Social (e-RIPS), Vol. VI, Nº 2; Housing Authority 
(2023), The private rental market in Malta. A holistic 
assessment based on registered contracts; Employment 
Agencies Regulations (2023). 

57 

39.91063.07.514.24.881.73.10.7133.420.123.126.4330.12.943.10.3Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022) 
 
 
 
   
 
 
 
education:  the  share  of  children  under  3  years  of 
age  in  formal  childcare  increased  significantly 
from  24%  in  2021  to  43.1%  in  2022  (vs  EU 
35.9%).  Implementation  of  the  European  Child 
Guarantee 
though  some 
measures lack target values. 

is  ongoing,  even 

Table A14.2:Situation of Malta on 2030 
employment, adult learning and poverty reduction 
targets 

(1)  Adult  Education  Survey,  adults  in  learning  in  the  past  12 
months, special extraction excl. guided on-the-job training 
(2)  EU  headline  target  set  as  a  reduction  in  the  number  of 
persons  at  risk  of  poverty  or  social  exclusion  (AROPE), 
reference year 2019. 
(3)  Malta  expresses  its  national  target  as  a  reduction  of  the 
share of persons at risk of poverty or social exclusion (AROPE) 
of 3.1 percentage points, reference year 2019. 
Source: Eurostat, DG EMPL. 

Access  to  social  protection  is  an  issue, 
especially  for  people  in  non-standard  forms 
of  work.  While  all  employed  and  self-employed 
people are formally covered by social protection in 
Malta,  some  of  them  find  it  difficult  to  get  the 
benefits to which they are entitled. The maximum 
duration  of  the  unemployment  benefit  is  among 
the  shortest 
in  the  EU  and  the  share  of 
unemployed  people  receiving  it  is  low.  Moreover, 
the recipient rate for those in non-standard forms 
of work is low and the poverty rate among quasi-
jobless households (with a very low work intensity) 
is high at 72.7% (vs EU 59.9% in 2022). People in 
Malta  self-report  low  levels  of  unmet  need  for 
medical  care  (0.3% vs  EU  2.2%)  but  the  share  of 
people  who  are  obese  (26.1%  vs  EU  14.8%)  or 
overweight  (62.5%  vs  EU  51.3%)  is  worryingly 
high. The ESF+ and the RRF promotes measures to 
boost  social  protection  systems  and  support 
vulnerable  groups,  while  also  planning  reforms 
and investments in healthcare and long-term care. 
Significant  additional  efforts  are  needed  to  reach 
the 2030 poverty reduction target of reducing the 
share  of  people  at  risk  of  poverty  or  social 
exclusion by 3.1 pps compared to the 2019 value. 

to 

tend 

skills  shortages  (Eurobarometer  on  the  European 
Year of Skills, 2023). Although 63% of adults had 
at least basic digital skills in 2022 (vs EU 55.5%), 
the  differences  in  skill  levels  are  significant.  In 
addition,  the  country  presents  both  vertical  (level 
of  education)  and  horizontal  mismatches (field  of 
education),  and  skills  sets 
reflect 
traditional gender roles. The share of adults (aged 
25-64)  participating  in  education  and  training  in 
the  previous  12  months  is  in  line  with  the  EU 
average (39.9% in 2022). However, only 16.3% of 
low-skilled  adults  (vs  EU  18.4%)  participated  in 
learning  activities,  against  37.6%  of  the medium-
skilled  and  65.9%  of  the  tertiary  educated.  In 
addition,  the  share  of  learners  enrolled  in  upper 
secondary vocational  education and training (VET) 
is  persistently  low  (27.0%  vs  EU  48.7%  in  2021). 
The  ESF+  allocates  43%  of  its  budget  to  quality 
and  inclusive  education,  training,  and  lifelong 
learning,  supporting  initiatives  to  prevent  early 
leaving  and  provide  higher  education 
school 
scholarships  in  key  sectors.  The  RRP  aims  to 
improve basic skills and literacy, track early school 
leavers,  enhance  online 
training,  and  adapt 
for  students  with 
infrastructure 
educational 
disabilities.  Nonetheless,  considerable  efforts  are 
needed to reach the national 2030 skills target of 
at least 57.6% of adults learning each year. 

The  risk  of  poverty  or  social  exclusion 
remains  high  for  specific  vulnerable  groups, 
revealing  the  presence  of  pressing  social 
issues.  In  2022,  the  share  of  people  at  risk  of 
poverty  or  social  exclusion  (AROPE)  at  20.1% 
remained  stable,  1.5 pps  below  the  EU  average 
(21.6%).  Yet, the  rates  are  much  higher  for  some 
vulnerable groups: non-EU nationals (30.6%), low-
skilled  adults  (30.9%),  over  65  (33.3%,  a  3 pps 
increase from 2021)  and, especially, persons with 
disabilities  (36%).  The  income  of  the  richest  20% 
of the population was 4.79 times higher than that 
of  the  poorest  20%  (almost  in  line  with  the  EU 
average).  Nevertheless,  in  2022,  social  transfers 
reduce  poverty,  as  measured  by  the  at-risk-of-
poverty rate, only by 26.4% (vs EU 35.0%), despite 
recent  improvements (103).  The  overall  AROPE  rate 
for  children  is  23.1%,  below  the  EU  average  of 
24.7%  in  2022.  However,  some  children  are  at  a 
greater  risk  of  poverty,  including  those  with  low-
skilled parents (50.2%). Free childcare is available 
in  employment  or 
to  children  with  parents 

(103) Results of the Joint Research Centre, based on the 

EUROMOD model. 

58 

IndicatorsLatest dataTrend            (2016-2022)2030 targetEU target 81.7(2023)39.9(2022)-0.6 pps(2022)Adult learning1 (%)57.660Employment (%)84.678Poverty reduction2, 3 (thousands)-3.1 pps-15,000 
 
 
   
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
Malta’s  education  and  training  system  based 
on  the  2023  Education  and  Training  Monitor  and 
the  2022  OECD  Programme  for  International 
Student Assessment (PISA) results.   

of  challenges  linked  to  skills  shortages  (see 
Annex 14). 

Graph A15.1: Underachievement in mathematics in 
Malta by country of birth, PISA 2022 

lifelong 

Lack  of  basic  skills  among  young  people 
represents  a  risk  for  skills  development, 
labour  productivity  and  competitiveness.  The 
latest  results  of  PISA  2022  show  that  more  than 
30%  of  15-year-olds  fail  to  achieve  a  minimum 
proficiency  level  of  basic  skills,  which  are  the 
learning  and  future 
foundation  for 
employability. 
In  all  three  fields  tested,  the 
proportion of underachieving students is above the 
EU  average  (Table  A15.1)  and  far  from  the  EU-
level target set for 2030 (<15%). The rate has not 
changed 
reading  since 
2015 (104).  Science  shows  a  decreasing  trend:  the 
share has decreased by 2.2 pps since then, but it is 
still 6.1 pps higher than the EU average (30.3% vs 
24.2%). These are in line with the negative results 
recorded  by  the  2021  Progress  in  International 
Reading  Literacy  Study  (PIRLS).  The  national 
curriculum framework is currently under revision. A 
new national education strategy (2024-2030) is in 
preparation  which  also  includes  a  proposal  for  a 
mathematical literacy strategy. 

in  mathematics  and 

Underachievement  is  widespread  across  the 
entire  socio-economic  distribution  and  the 
socio-economic  gap  has  not  improved  since 
2015. Around 47.7% of students from the bottom 
socio-economic  quartile  lacked  basic  skills 
in 
mathematics (EU 47.5%) in 2022 and the rate for 
the  top  quartile  was  also  high  (17.2%  vs  11%  at 
EU level). This shows that underachievement does 
not  only  concern  disadvantaged  students; 
it 
suggests that the Maltese school system does not 
adequately  support  the  competence  development 
of  all  students.  However,  results  are  significantly 
better for students attending Independent schools: 
the  underachievement  rate  in  mathematics  is 
16.7%,  23.9  pps  and  15.1  pps lower  than  that  of 
students attending public and Church schools (105), 
respectively. In the past decade, Malta has mainly 
focused  its  attention  on  reducing  early  school 
leaving by strengthening vocational education. The 
lack of basic skills represents a risk in the context 

Source: OECD (2023). 

Low  shares  of  top-performing  students  may 
hinder  innovation  capacity.  The  share  of  top 
performers in mathematics was 7.2% (EU 7.9%) in 
2022 but it has decreased by 4.6 pps since 2015. 
With a decrease of 3.1 pps in the same period, the 
rate  in  science  stood  at  4.6%  in  2022  against 
6.9%  at  EU  level.  Only  4.5%  of  students  had 
advanced skills in reading in 2022 (EU 6.5%). 

Foreign-born  students  are  less  likely  to 
underachieve.  The  proportion  of  low-achieving 
students  is  higher  among  native-born  students 
without  migrant  background  (31.2%)  than  among 
foreign-born students (25.7%) who represent 8.9% 
of  the  student  population  according  to  PISA.  This 
share has increased by 5.4 pps since 2015. Results 
are  worse  among  native-born  students  with 
foreign-born parents (37.6%). 

Teacher  shortages  have  been  addressed  by 
employing  retired  teachers,  teachers  on 
reduced  hours,  and  substitute  teachers. 
Typically,  substitute  teachers  have  a  level  of 
qualification  different  or  lower  than  required  for 
fully  qualified  teachers;  this  can  have  a  potential 
impact on the quality of teaching. They can obtain 
the  teacher’s  permanent  warrant  only  if  they 
improve 
they 
represented  12%  of  the  total  teaching  staff  at 
primary and secondary level (106). 

their  qualification. 

In  2022, 

(104) Malta did not participate in PISA 2012. 

(105) Data provided by the Ministry for Education, Sport, Youth and 

(106) Data provided by the Ministry for Education, Sport, Youth and 

Research.  

Research. 

59 

0102030405060TotalAdvantagedstudentsDisadvantagedstudentsForeign-bornstudentsNative-bornstudentsNative-bornstudents withforeign-bornparents%20182022 
 
 
   
 
 
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

Participation  in  early  childhood  education 
and  care  by  children  above  the  age  of  3  is 
continuing  to  fall.  The  rate  stood  at  86.2%  in 
2021,  compared  with  an  EU  average  of  92.5%. 
The  rate  has  further  decreased  by  2.9 pps  since 
2020.  Conversely,  the  participation  of  children 
under  3  in  formal  childcare  returned  to  its  pre-
pandemic levels (see Annex 14). 

Although still slightly above the EU average, 
the rate of early leaving from education and 
training (ELET) is on a declining trend. It stood 
at 10.0% (EU 9.5%) in 2023 and it has decreased 
by 8.1 pps since 2012. This may be due to a series 
of measures undertaken in recent years. Efforts to 
curb the rate continue: in 2023, a new strategy on 
ELET that focused on prevention, intervention and 
compensation  mechanisms  was  published.  The 
data  warehouse  project  envisaged  in  the  national 
recovery  and  resilience  plan  may  also  help  in 
designing  better  targeted  actions  providing  data 
about  students  in  public  schools.  It  represents  a 
step towards more evidence-based policy making.  

Tertiary  educational  attainment  increased in 
2023. The tertiary educational attainment rate of 
people  aged  25-34  stood  at  46.3%  in  2023  (EU 
43.1%),  3.8  pps  higher  than  in  2022.  It  has 
increased by 18 pps since 2012, mainly driven by 
the  increasing  proportion  (20  pps)  of  native-born 
people attaining a tertiary qualification in the past 
decade.  The  gap  with  EU  nationals  (49.9%)  stood 
at 2.7 pps in 2023, while the rate for native-born 
individuals  (47.2%)  was  2.5  pps  higher  than  that 
of non-EU-born individuals. For the latter, the rate 
decreased  between  2021  and  2022  (from  45.5% 
to 36.2%), then increased again to 43.8% in 2023. 
It  is  expected  that  more  native-born  people  will 
achieve  tertiary  education  in  the  years  to  come. 
The  number  of  enrolments  in  tertiary  education 
continued  to  increase  between  2020  and  2021 
(+7.5 pps). However, the results at school level call 
for  measures  to  ensure  that  entrants  to  tertiary 
education  have  higher  competences  and  that 
tertiary  graduates  can  effectively  respond  to 
labour market needs (Annex 14). 

60 

96%99.4%201391.8%201393.8%92.2%86.2%202192.5%2021,dReading< 15%35.6%201518.0%35.9% 22.5%36.3%202226.2%2022Mathematics< 15%29.1%201522.1%30.2%22.9%32.6%202229.5%2022Science< 15%32.5%201516.8%33.5%22.3%30.3%202224.2%2022< 9 %18.1%12.6%14.0%10.5%10.0%9.5%Men22.6%14.5%14.1%12.1%12.1%u11.3%Women13.4%10.6%13.8%8.7%7.6%u7.7%Cities20.3%b11.2%17.7%9.4%9.6%u8.6%Rural areas19.0%bu14.0%:u11.0%:u9.9%5By country of birthNative18.0%11.3%13.6%9.2%5.4%u8.2%EU-born:u26.2%:u22.4%:u21.0%Non EU-born:u30.1%26.1%u23.0%23.7%u21.6%6Socio-economic gap (percentage points)::31.929.530.6202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :55.4% 64.5%45%28.3%34.1%40.2%38.7%46.3%43.1%Men24.7%29.1%36.0%33.3%40.6%37.6%Women32.1%39.2%44.8%44.2%53.7%48.8%Cities26.8%b43.5%41.0%49.0%45.3%53.3%Rural areas32.0%b24.8%54.3%27.7%:u31.7%Native27.2%35.4%37.5%39.7%47.2%44.2%EU-born:u29.3%43.9%36.7%49.9%40.2%Non EU-born45.0%24.2%49.5%31.0%43.8%37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::32.8%201637.4%201639.9%202239.5%20228.8%201322.7%20137.7%23.8%9.0%202124.5%2021Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over1Participation in early childhood education (age 3+)2Low-achieving 15-year-olds in:Early leavers from education and training(age 18-24)3Total3By gender4By degree of urbanisation201220182023IndicatorTargetMaltaEU-27MaltaEU-27MaltaEU-27 
 
 
   
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
population health and the health system in Malta. 

Life  expectancy  in  Malta  has  been  higher 
than  the  EU  average  both before  and  during 
the  COVID-19  pandemic.  Life  expectancy 
slightly  decreased  in  2022,  probably  due  to  an 
increase  in  the  reported  number  of  COVID-19 
deaths  between  2021  and  2022 (107).  Malta’s 
mortality  rate  from  treatable  causes  was  lower 
than  the  EU  average  in  2021.  At  the  same  time, 
mortality  in  economically  active  age  groups,  as  a 
share  of  total  mortality  and  relative  to  the 
workforce  size,  is  among  the  lowest  in  the  EU.  In 
2021,  diseases  of 
the  circulatory  system 
(‘cardiovascular  diseases’)  and  cancer  were  the 
leading 
has 
comparatively  high  mortality  rates  from  diabetes 
and  ischaemic  heart  disease,  which  correspond 
with  the  high  prevalence  of  overweight  and 
obesity. Malta has the highest obesity rates in the 
EU,  among  both  adults  and  children;  the  topic  is 
high on the public health agenda. 

of  mortality.  Malta 

causes 

primary  and  outpatient  care  and  for  medicines). 
Nevertheless,  Malta  reports  one  of  the  lowest 
levels  of  self-reported  unmet  needs  for  medical 
care in the EU, at 0.3% of the population in 2022 
(see  Annex 14).  The  largest  share  of  total  current 
health  expenditure  goes  on  outpatient  care, 
followed  by  pharmaceuticals  and  inpatient  care. 
Strengthening primary care in general and shifting 
treatment of chronic diseases from cost-intensive 
care in hospitals to primary care and community-
care  settings  are  ongoing  challenges.  Some  of 
Malta’s European Structural and Investment Funds 
these 
programmes 
challenges. Malta is facing the highest increase in 
public  spending  on  health  in  the  EU  due  to  the 
ageing  of  the  population.  This  is  projected  to 
increase by 2.1 percentage points (pps) of GDP by 
2070  (compared  to  0.6 pps  for  the  EU  overall), 
raising  long-term  fiscal  sustainability  concerns 
(see Graph 16.2 and Annex 21). 

contribute 

address 

to 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

Health spending relative to GDP significantly 
increased  from  2019  to  2021  and  is  now 
near the EU average. Public spending on health 
as  a  proportion  of  total  health  spending  is 
historically low but increased in 2020 and 2021 to 
reach 67.4%, still below the EU average of 81.1%. 
Household  out-of-pocket  payments,  at  29.7% 
share  of  total  health  expenditure  in  2021,  are 
among the highest in the EU (especially for private 

(107) Based on data provided directly by Member States to the 

European Centre for Disease Prevention and Control, under 
the European Surveillance System. 

Baseline scenario 
Source: European Commission / EPC (2024) 

Spending  on  prevention  in  Malta  remains 
among the lowest in the EU. Between 2019 and 
2021, spending on prevention in Malta, as a share 
of  total  health  expenditure  decreased  from  1.5% 
to 1.2%, contrary to the trend across the EU. Malta 
was among the few EU countries where less than 
3%  of 
total  healthcare  spending  went  on 
prevention  in  2021,  against  an  EU  average  of 
6.0%. Proportionally, budget shares for prevention 
across  the  EU  increased  most  for  emergency 
response,  disease  detection  and  immunisation 
programmes. Low spending levels for prevention in 
Malta  raise  questions  about  the  preparedness  of 
the health system for possible public health crises 
in the future. Another measure to safeguard public 
health is the ongoing rationalisation of the use of 
antimicrobials, as part of broader efforts to foster 
the  rational  use  of  medicines.  The  situation  in 
improved  significantly,  with  daily 
Malta  had 

61 

82.482.582.982.382.582.480.981.081.380.480.180.6201720182019202020212022MaltaEU6.65.10.62.102468EUMalta% of GDP20242070increase 
 
   
 
   
 
Table A16.1:Key health indicators 

The  EU  average  is  weighted  for  all  indicators  except  for  doctors  and  nurses  per  1  000  population,  for  which  the  EU  simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece. Portugal (licensed to practise) and 
Slovakia  (professionally  active). Nurses’  density  data  refer  to  practising nurses  in  all  countries except  Ireland,  France,  Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

consumption  in  2021  falling  to  76%  of  the  2019 
level  (20.7  daily  defined  doses  (DDDs)  per  1 000 
population).  However,  in  2022  daily  consumption 
shot up to the highest level it has ever been (24.0 
DDDs).  According  to  the  Council  Recommendation 
on stepping up EU actions to combat antimicrobial 
resistance  in  a  One  Health  approach,  Malta  is 
supposed, by 2030, to reduce total consumption of 
antibiotics  in  community  and  hospital  settings 
combined by 18% from the 2019 level. 

Malta  has  implemented  several  reforms  to 
tackle  shortages  of  health  workers.  The 
numbers  of  doctors  and  nurses  per  1 000 
population are near the EU average and have been 
rising  over  the  last  few  years.  However,  Malta 
relies on foreign nurses, especially in hospitals. In 
the  past,  shortages  had  been  exacerbated  by  an 
increasing number of nurses leaving Malta to work 
in  other  (English-speaking)  countries  that  have 
offered more attractive working conditions (108). In 
addition,  demographic  change  is  estimated  to  be 
more  severe  in  Malta  than  in  most  other  EU 
countries (109).  Therefore,  having  an  appropriate 
number of health workers is even more important 
to ensure that the health system is accessible and 
resilient in the long run. 

EU  funds  support  substantial investments  in 
healthcare 
its  national 
in  Malta.  Through 
recovery  and  resilience  plan  (RRP),  Malta  plans  to 
invest  EUR 48.9 million  in healthcare.  Investments 

(108) Malta is facing exodus of nurses to the UK 

(timesofmalta.com) 

(109) Source: https://economy-

of 

under the RRP focus mainly on setting up a Blood, 
Tissue  and  Cell  Centre,  digitalisation  and  new 
technologies.  But  there  are  also  measures  to 
tackle  some  of  the  above-mentioned  challenges, 
such  as  workforce-related  issues  (including  a 
bespoke  workforce-planning 
tool  and  better 
integration  of  foreign  health  workers)  and  the 
children. 
obesity 
prevalence 
Complementary  investments  in  healthcare  are 
planned under the cohesion policy funds in 2021-
2027.  Malta  will  invest  EUR 139 million  from  the 
European  Regional  Development  Fund  in  health 
equipment,  health  infrastructure,  and  e-health 
services  and  applications.  Malta  will  also  deploy 
EUR 16 million from the European Social Fund Plus 
to  improve  the  accessibility,  effectiveness  and 
resilience of the health system (110). 

among 

(110) The EU cohesion policy data reflect the status as of 13 May 

finance.ec.europa.eu/system/files/2021-10/ip148_en.pdf. 

2024. 

62 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)91.885.089.381.8NA93.3 (2021)Cancer mortality per 100 000 population237.3203.5212.5198.3NA235.4 (2021)Current expenditure on health, % GDP 8.59.110.610.4NA10.9 (2021)Public share of health expenditure, % of current health expenditure63.562.566.767.4NA81.1 (2021)Spending on prevention, % of current health expenditure 1.31.51.51.2NA6.0 (2021)Available hospital beds per 100 000 population431410438414NA525 (2021)Doctors per 1 000 population4.04.04.24.3NA4.1 (2021)*Nurses per 1 000 population7.87.78.08.0NA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***20.220.716.615.824.019.4 (2022) 
 
 
 
 
 
   
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

which  was  well  below  the  EU  average  of  125.6, 
including  a  high  share  of  environment-related 
patents’ application. 

Investment  and  subnational  reform  needs 
ahead 

factors, 

including 

to  multiple 

Stepping up investments in renewable energy 
remains  a  high  priority.  Malta  has  one  of  the 
lowest shares of renewables in gross final energy 
consumption  in  the  EU.  More  investments  are 
needed to accelerate the roll-out of renewables in 
order to meet climate neutrality commitments and 
in  view  of  the  expected  rise  in  electricity  demand 
linked 
rising 
economic  activity,  population  growth,  the  gradual 
transition  to  electric  mobility  and  shore-to-ship 
supply.  Together  with  the  planned  ERDF  support 
for  the  development  of  a  second  electricity 
interconnector  linking  Italy  and  Malta  and  the 
deployment  of  energy  storage  solutions,  those 
investments will further contribute to securing the 
supply of electricity and improving Malta’s energy 
mix.  In  addition,  Malta  shows  a  significant  wind 
energy  potential  with  3  219  full  load  hours  per 
year  as  compared  to  the EU  average  of  1  153  in 
2000-2005,  and  further  investments  in  wind 
energy, 
floating  offshore  wind 
including 
projects, would be warranted.  

in 

Traffic  congestion  and  high  emissions  from 
road  transport  persist  in  Malta.  Increasing 
sustainable  multimodal  solutions  and  active 
transport  is  therefore crucial.  There  is  a  need 
to  boost  investments  in  safe  and  interconnected 
soft  mobility infrastructure,  such  as  cycling  lanes, 
pedestrian  pathways,  improved  service  quality  in 
public 
lanes. 
Investments  in maritime transport  solutions  using 
clean  energy  is  also  key.  They  would  create  the 
conditions  to  move  towards  green  alternative 
modes  of  transport  while  contributing  to  curbing 
emissions  from  the  transport  sector.  This  would 
help  Malta  in  its  path  towards  a  better  living 
environment with improved air quality and reduced 
noise pollution. 

transport  and 

reserved  bus 

Annex 17 showcases the economic and social 
territorial  dynamics  in  Malta.  It  provides  an 
analysis  of  economic,  social  and 
territorial 
cohesion 
in  Malta  and  assesses  emerging 
investment  and  reform  needs  to  foster  economic 
growth, social development and competitiveness in 
the country. 

of 
Overview 
performance at regional level 

economic 

and 

social 

GDP  in  Malta  continues  its  path  of  robust 
growth,  with  territorial  disparities  reducing 
slightly.  Between  2013  and  2022,  Malta’s  GDP 
average  growth  climbed  to  6.3%  (EU  1.6%), 
compared  to  5.0%  in  2011-2020  (EU  0.8%). 
Significant  disparities  between  Malta  mainland 
and  Gozo  and  Comino  remained  in  terms  of  GDP 
per  capita  (in  PPS)  being  respectively  108%  and 
57% of the EU average in 2022.  

Graph A17.1: Malta, NUTS3: GDP per capita, 
Average Annual GDP per capita growth, Average 
Annual Productivity Growth 

Source: Eurostat 

Labour productivity in Malta  lags  behind  the 
rest  of  the  EU,  with  significant  gaps 
reflecting existing disparities within Malta. In 
2022, labour productivity measured in gross value 
added (in PPS) per person employed was 95.5% of 
the  EU  average,  varying  extensively  between  the 
mainland  and  Gozo  and  Comino,  measuring 
respectively 97% and 68.4% of the EU average. 

Research  and  innovation  systems  in  Malta 
continue  to  suffer  from  underinvestment.  In 
2021,  R&D  expenditure  accounted  for  0.65%  of 
GDP  and  only  0.42%  in  the  business  sector,  with 
no  variation  when  compared  to  2020  levels.  This 
remains  significantly  below  the  EU  average, 
respectively  2.24%  and  1.48%.  Similarly,  patent 
applications  to  the  European  Patent  Office  in 
2018-2019  were  93.4  per  million  inhabitants, 

63 

0123456020406080100120European UnionMaltaGozo and CominoGDP per head (PPS, EU=100), rhsAverage Annual GDP per head growth (2012-2021), %, lhsAverage Annual Productivity Growth (2012-21), %, lhs 
 
  
Table A17.1:Selected indicators at regional level in Malta 

Source: Eurostat, EDGAR database 

More  broadly,  it  is  essential  for  Malta  to 
progress  in  its  green  transition.  Scaling-up 
investments 
in  energy  efficiency  measures, 
improving  biodiversity  protection  and  boosting 
waste  recycling  and  the  preparation  of  waste  for 
re-use  while  reducing  landfill  rates,  are  of  high 
importance  to  address  some  of  the  current 
challenges.  Malta  could  also  benefit  from  the 
opportunities  of  the  Strategic  Technologies  for 
Europe  Platform 
industry 
transformation. 

to  support 

(STEP) 

For  a  more  effective  green  transition  and  a 
pronounced  shift  towards  green  alternative 
modes  of  transport,  a  reform  is  to  be 
envisaged for a comprehensive and improved 
transport  planning  which  considers  the 
environmental fragility and space limitations 
in  Malta.  Both  cohesion  policy  programmes  and 
the  RRP  include  investments  contributing  to  clean 
mobility.  The  reform  needs  to  embrace  measures 
aimed  at  disincentivising  car  use  and  creating 
space 
transports’ 
infrastructure, while making the use of sustainable 
alternative transport solutions more attractive and 
efficient.  

for  alternative  modes  of 

64 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)GDP growthGDP per head growthEmployment rate, ages 20-64Unemployment rateR&D expenditureR&D expenditure in the business enterprise sector (BERD)Patent applications to the EPOWind energy potentialIndex, EU27 = 100 (2022)Index, EU27 = 100 (2022)Average % change on the preceding year (2013-2022)Average % change on the preceding year (2013-2022)% of population aged 20-64 (2022)% of labour force (2022)% of GDP (2021)% of GDP (2021)per million inhabitants (2018-2019)full load hours per year (2000-2005)European Union (27 MS)100.0100.01.61.474.66.22.31.5125.61153.0Malta104.095.56.33.881.12.90.70.493.43219.0Malta108.097.06.33.8100.23291.0Gozo and Comino/Għawdex u Kemmuna57.068.45.63.80.02998.0NUTS region name 
 
 
  
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

Malta  has  a  predominantly  bank-based 
financial  sector,  with  a  high  concentration 
rate. One  of  Malta’s  specificities  is  its  role  as  an 
international banking centre, as a large share of its 
banking sector is composed of foreign institutions 
with  no  exposure  to  the  domestic  economy. 
However, the share of domestic credit institutions 
has  been  increasing  over  the  last  decade,  and 
these  institutions  accounted  for  an  estimated 
64.3% of total banking-sector assets in Q3-2023, 
compared to 33.5% in 2015. The concentration of 
the banking sector is significant, as the five largest 
banks  held  75.7%  of  the  sector’s  total  assets  at 
the end of 2022. Four Maltese banks are identified 
as  systemically  important  (O-SII).  Total  banking-
sector  assets  expressed  as  a  percentage  of  the 
country’s GDP has continued to decline and stood 
at  228.4%  in  Q3-2023,  firmly  below  the  EU 
average. 

Core 

domestic 

employment. 

Banks’  performance  improved  further  in  the 
first half of 2023, supported by a favourable 
economic  climate,  i.e.  a  strong  rise  in  GDP 
and 
banks 
significantly improved their profitability, supported 
by  28.9%  year-on-year  growth  in  net  interest 
income by June 2023. In addition, the base effect 
of one-off litigation costs incurred in the first half 
of  2022  played  an  important  role.  As  a  result, 
return  on  equity  of  the  total  sector  more  than 
doubled  to  reach  11.2%  in  Q3-2023,  better  than 
the  EU  average  of  9.9%.  This  marks  a  significant 
change,  as  Maltese  banks’  return  on  equity  was 
significantly  lagging  their  EU  peers  over  the 
previous 5 years. 

banks dropped in one year by 1.2 pps to 7.8% of 
total loans in June 2023. 

Growth in lending activity was lower than in 
previous  years,  and  was  mainly  driven  by 
mortgages.  For 
the  domestic  core  banks, 
mortgages  to  residents  grew  by  3.4%  in  the  6 
months to June 2023 and consumer credit rose by 
2.0%.  Lending  to  corporations  grew  by  3.3%,  a 
slowdown  compared  to  the  first  6  months  of 
2022. Mortgage activity has been the main driver 
of lending activity in recent years, and mortgages 
account  for  just  over  55%  of  total  loans  to 
residents, implying some concentration risk. House 
prices  continued  to  rise  in  2023,  but  started  to 
show  some  signs  of  a  temporary  slowdown. 
Annual  house  price  growth  remained  at  close  to 
4.5% in the second quarter of 2023, with a small 
moderation in  the  rate  of increase  starting  at  the 
end  of  2022.  The  future  path  of  credit  growth 
depends heavily on economic growth in Malta and 
the  level  of  interest  rates,  which  might  affect 
credit  demand.  In  order  to  strengthen  banks’ 
resilience  to  a  possible  housing-sector  shock,  the 
authorities  introduced  a  sectoral  systemic  risk 
buffer  targeting  residential  mortgage  exposures. 
This buffer was initially set at 1% from the end of 
September  2023,  and  will  increase  to  1.5%  from 
the end of March 2024. 

Graph A18.1: Evolution of credit activity by sector 

Maltese banks have maintained their capital 
levels  well  above  regulatory  requirements. 
The liquidity position of core domestic banks stood 
at 394.8% in June 2023, an increase of almost 15 
pps in 6 months. The capital adequacy ratio stood 
at 23.8% in Q3-2023 (EU average: 19.6%), 0.1 pps 
less  than  in  December  2022.  Asset  quality  also 
improved,  as  the  ratio  of  non-performing  loans 
(NPLs) declined to 2.2% in Q3-2023, slightly above 
the  EU  average  of  1.8%.  The  NPL  ratio  for  core 
domestic  banks  stood  at  2.6%  in  June  2023, 
slightly  higher  than  that  of  the  total  banking 
sector.  The  highest  level  of  NPLs  (around  6.5%) 
was  recorded  in  loans  to  domestic  non-financial 
corporations, which is the only segment where NPL 
ratios  have  worsened  since  December  2022.  The 
overall  level  of  Stage  2  loans  for  core  domestic 

Source: ECB. 

financial 

sector  appears 
The  Maltese 
resilient  overall.  The  European  Systemic  Risk 
Board  (ESRB)  identified  in  its  2021  report  Malta’s 
key vulnerabilities as being high rates of growth in 
housing  credit  and  high  household  indebtedness. 

65 

-20-15-10-50510152020092010201120122013201420152016201720182019202020212022Total privateNFCHH% 
 
 
   
 
Table A18.1:Financial soundness indicators 

(1) Last data: Q3 2023.  
(2) Data are annualised. 
(3) Data available for EA countries only, EU average refers to EA area. 
Source: ECB, Eurostat. 

The  ESRB’s  updated  report  from  February  2024 
confirmed that the current policy measures (limits 
on loan-to-value ratios, debt-to-income ratios, and 
loan  maturities,  together  with  the  measures 
allowed by Article 124 of the Capital Requirements 
Regulation) are appropriate and sufficient. 

of 

ownership 

information 

terrorism,  Malta 

On anti-money laundering and countering the 
has 
financing 
implemented  key  reforms  in  the  area  of 
beneficial 
and 
financial  intelligence  units.  These  reforms  are 
also  part  of  Malta’s  commitments  under  its 
recovery  and  resilience  plan.  Furthermore,  Malta 
updated  and 
risk 
assessment  in  December  2023.  This  212-page 
document  includes  sectoral  risk  assessments  for: 
(i) the financial services sector; (ii) designated non-
financial  businesses  and  professions;  and  (iii) 
virtual financial asset service providers. 

published 

national 

its 

Sustainable  finance  is  not  yet  developed  in 
Malta  but  the  first  steps  to  developing  it 
have  now  been  made.  Malta’s  first  green  bond, 
issued  in  August  2023  by  the  Water  Services 
Corporation,  was 
listed  on  the  Malta  Stock 
Exchange  in  October  2023.  Malta  has  not  yet 
issued any sovereign green bonds. 

Ten  domestically  relevant  insurers  continue 
to  operate  on  healthy  capital  and  liquidity 
levels.  The  Central  Bank  of  Malta  published  in 
2023 
the 
Interim  Financial  Stability  Report 
updated  methodology  for  identifying  domestically 
relevant insurance companies. With these updated 

66 

results, 10 insurance companies out of 68 licensed 
in  June  2023  were  classified  as  domestically 
relevant: 4 in the life sector and 6 in the non-life 
sector  (one  more  compared  to  the  previous 
methodology)., In the first half of 2023, the assets 
of  these  10  insurers  increased  by  2.8%  y-o-y  to 
EUR 3.7 billion,  equivalent  to  20.5%  of  GDP.  Total 
assets  held  by  all  insurers  in  Malta  amounted  to 
74.2%  of  GDP  in  Q2-2023,  well  above  the  EU 
average  of  54.3%.  Insurers  in  the  life  segment 
have  strongly  increased  their  capital  buffers.  
Solvency Capital Requirement (SCR) coverage ratio 
of  226.1%,  a  recovery  of  46  pps  since  December 
2022.  The  SCR  coverage  ratio  in  the  non-life 
segment  remains  solid  at  230.9%.  Gross  written 
premiums for life insurers dropped 21.8% y-o-y in 
December  2023,  likely  due  to  competition  from 
other financial products with higher yields. 

The  assets  held  by  37  investment  funds 
classified as domestically relevant increased 
by half a per cent in first half of 2023, after 
an  18-month  decline.  These  assets  stood  at 
EUR 1.5 billion,  or  8.4%  of  GDP  in  June  2023. 
Equity  funds  booked  the  highest  rate  of  increase 
year-on-year  (10.2%),  while  bond  funds  shrank 
2.2% 
to 
redemptions.  The  level  of  cash  and  deposits  in 
June 2023 (at 4% of assets) held by domestically 
relevant  investment  funds  reached  their  lowest 
level since 2016 and was 4 pps below the 5-year 
average, which may pose some risk in the event of 
a sudden increase in redemptions. Bonds continue 
to  account  for  almost  two  thirds  of  funds’  total 
assets and their average maturity decreased. 

the  same  period,  mainly  due 

in 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)402.5340.5289.9302.3278.5243.8230.8257.9185.8Share (total assets) of the five largest banks (%)80.977.575.174.875.675.7--69.6Share (total assets) of domestic credit institutions (%)142.147.853.558.761.764.564.3-62.9NFC credit growth (year-on-year % change)14.83.52.02.7-6.46.16.5-5.4HH credit growth (year-on-year % change)6.57.58.75.89.79.69.1-2.5Financial soundness indicators:1        - non-performing loans (% of total loans)3.13.13.23.63.02.32.11.81.7- capital adequacy ratio (%)21.122.323.425.124.523.924.319.620.5- return on equity (%)27.25.26.00.33.54.310.210.213.3Cost-to-income ratio (%)140.640.550.349.363.857.246.053.245.8Loan-to-deposit ratio (%)161.475.257.459.656.158.556.793.079.9Central bank liquidity as % of liabilities0.50.20.10.62.30.70.7-1.1Private sector debt (% of GDP)124.3120.6129.3142.7132.7121.8-133.0118.4Long-term interest rate spread versus Bund (basis points)96.398.992.599.287.3126.6128.3107.9104.4Market funding ratio (%)32.832.935.734.437.735.4-51.839.8Green bonds outstanding to all bonds (%)3-------3.72.51-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
   
 
ANNEX 19: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Malta’s  tax  system.  It  includes 
information on the tax structure (the types of tax 
that  Malta  derives most  of  its  revenue  from),  the 
tax  burden  on  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance.   

information  on 

corporate 

The  taxation  system  in  Malta  is  rather 
distinct  from  the  EU  average  both  in  terms 
of  the level of  taxation  and  its  composition. 
In  particular,  tax  revenues  as  a  share  of  Malta’s 
GDP, particularly in relation to labour taxation, are 
low  compared  with  the  EU  average.  Total  tax 
revenue constituted 29% of Malta’s GDP in 2022, 
a slight decline from 2021 and well below the EU 
aggregate of 40.2% (see Table A19.1). Labour tax 
revenues as a share of GDP gradually increased to 
12.2%  in  2022,  but  remained  substantially  below 
the  20.3%  EU  average.  By  contrast,  Malta’s 
reliance  on 
taxation  has  been 
consistently  above  the  EU  average,  reflecting  the 
high importance of the corporate sector (measured 
as the share of gross operating surplus over gross 
value  added)  for  the  Maltese  economy.  Both 
consumption  tax  revenues  and  environmental 
taxes  as  a  percentage  of  GDP  remained  slightly 
below  the  EU  aggregate.  Pollution  and  resources 
taxes as a share of environmental taxes are above 
the  EU  average.  However,  there  may  be  potential 
to  strengthen  the  application  of  the  polluter  pays 
principle.  Malta  has  implemented  three  of  the  six 
main  types  of  resource  and  pollution  taxes 
(i.e. taxes  on  waste 
landfilling,  waste  water 
pollution  and  plastic  products).  There  remains 
scope  to  expand  waste  disposal  taxes  (including 
incineration) and implement the three other types, 
(i.e.  taxes  on  NOx  emissions,  fertilisers  and 
pesticides). 

The  labour  tax  wedge  in  Malta  is  low 
compared  with  the  EU  average  across  all 
income  levels.  The  redistributive  effect  of 
the tax-benefit system is limited. Graph A19.1 
shows  that  the  labour  tax  wedge  for  Malta  in 
2023  was  much  lower  than  the  EU  average  for 
single  people  at  various  income  levels.  Second 
earners  at  67%  of  the  average  wage,  whose 
spouses  earn  the  average  wage,  also  face  a  tax 
wedge  that  is  below  the  EU  average.  Labour 
income  taxation  is  less  progressive  in  Malta  than 
in  the  EU  average.  In  fact,  at  167%  of  average 
income,  the  tax  wedge  is  lower  than  for  those 
earning  an  average  wage,  which  even  suggests 

regressive  taxation.  The  limited  progressivity  of 
the labour tax system is also reflected in the fact 
that  the  tax  and  benefit  system  reduce  income 
inequality (as expressed by the Gini coefficient) to 
less than the EU average in 2022 (Table A19.1). 

Graph A19.1: Tax wedge for single and second 
earners as a % of total labour costs, 2023 

The second earner tax wedge assumes a first earner at 100% 
of the average wage and no children. For the methodology of 
the  tax  wedge  for  second  earners,  see  OECD,  2016,  Taxing 
Wages 2014-2015. 
Source: European Commission 

In terms of tax collection, the large VAT gap 
stands  out.  Despite  levying  one  of  the  lowest 
standard  VAT  rates  in  the  EU,  Malta  had  the 
second-highest  VAT  gap 
(the  gap  between 
revenues actually collected and the theoretical tax 
liability) in the EU in 2021 at 25.7% – this is over 
five  times  more  than  the  EU  average  and  is 
forecast  to  decrease  only  slightly  in  2022.  It  is 
also remarkable that Malta has not witnessed the 
steady  reduction  in  the  VAT  gap  that  has  been  a 
hallmark  of  the  last  few  years  in  most  Member 
States. According to a recent study, the cost of tax 
compliance in Malta is the lowest in the EU  (111).  

The  Maltese  tax  system  was  recently 
updated  to  fulfil  the  commitments  made 
under the Recovery and Resilience Plan (RRP). 
The Maltese RRP contains a number of tax-related 
measures,  which  are  especially  aimed  at 
addressing  the  aggressive  tax  planning  practices 
identified  within  the  context  of  the  European 
Semester.  Recent  reforms  adopted  within  the 
framework of the RRP implementation include the 
entry  into  force  of:  (i) specific  transfer-pricing 
rules;  (ii) a  spontaneous  exchange  of  information, 

(111) See Figure 18 in Tax compliance costs for SMEs: An update 
and a complement, p. 31, available at Tax compliance costs 
for SMEs - Publications Office of the EU (europa.eu). 

67 

22.927.131.829.233.52025303540455050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - MTSingle earner - EU averageSecond earner -  MTSecond earner -  EU average 
 
       
 
 
in 

tax  authorities 

successful  applicants 

whereby  Malta’s 
exchange 
information  with  the  original  jurisdictions  of  tax 
residence  of 
the 
citizenship scheme; and (iii) a revised corporate tax 
return  to  collect  information  on  dividends  derived 
in  non-
from  bodies  of  persons 
cooperative  jurisdictions.  In  addition,  a  dedicated 
study  concerning  measures  relating  to  inbound 
and  outbound  payments,  analysing  the  state  of 
play  and  providing  recommendations,  is  expected 
to  be  followed  up  by  implementing  legislation  in 
2024. 

resident 

Graph A19.2: Total outgoing dividends by Member 
States in % of GDP, 2022 

to 

linked 

recent 

reforms 

through SPEs are also well above the EU average, 
which suggests that Malta’s tax structure may be 
being  used  for  aggressive  tax  planning  purposes. 
The 
the  RRP 
implementation  constitute  important  progress  in 
limiting  aggressive  tax  planning.  However,  until 
further  action  is  taken  non-domiciled  company 
rules  and  the  absence  of  withholding  taxes  (or 
equivalent  defensive  measure)  continue  to  pose 
aggressive  tax  planning  risks.  The  citizenship  and 
residence  scheme  also  raises  serious  concerns 
regarding security, money laundering, tax evasion, 
and  corruption.  Since  January  2022,  Malta  has 
allowed the spontaneous exchange of information 
on successful applicants of the citizenship scheme 
with  the  authorities  of  the  applicants’  original 
jurisdiction  of  tax  residence,  in  line  with  its  RRP 
commitment, but this is limited to new applicants. 

TEST  

Source: European Commission 

Despite  recent  progress,  tackling  aggressive 
tax  planning  remains  a  priority.  Graph  A19.2 
shows that outgoing dividends flows as a share of 
GDP are among the highest in the EU. FDI flows as 
a  proportion  of  GDP  as  well  as  their  stock  held 

Table A19.1:Taxation indicators 

(1) (1) Forward-looking effective tax rate (OECD).  
(2) A higher value indicates a stronger redistributive impact of taxation.  
(*) EU-27 simple average.  
(**)  Forecast  value  for  2022,  if available.  For  more  details  on  the  VAT  gap,  see  European  Commission,  Directorate-General  for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698.  
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage:  
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en.  
Source: European Commission and OECD 

68 

0%100%200%300%400%500%MTLUCYIENLHUCZBELTEEFIBGSELVPTSISKRODKHRPLFRELESDEITATMT2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)30.929.029.429.037.940.040.440.2Labour taxes (as % of GDP)9.912.012.012.220.021.320.720.3Consumption taxes (as % of GDP)11.910.19.89.910.810.711.211.0Capital taxes (as % of GDP)9.16.97.56.67.18.08.68.9Of which, on income of corporations (as % of GDP)5.64.65.14.32.42.53.03.4Total property taxes (as % of GDP)1.00.70.80.81.92.32.22.1Recurrent taxes on immovable property (as % of GDP)0.00.00.00.01.11.21.11.0Environmental taxes as % of GDP2.82.21.81.62.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)18.922.421.722.622.933.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)26.431.030.831.531.841.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)28.828.828.819.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)7.26.36.26.38.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)174.9140.040.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)30.927.525.724.69.75.4Tax structureProgressivity & fairnessTax administration & complianceMaltaEU-27 
 
   
 
 
   
 
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1:Key economic and financial indicators 

(1) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

69 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)2.72.55.212.58.15.64.64.3Potential growth (y-o-y).3.26.63.96.75.14.94.9Private consumption (y-o-y)2.81.32.28.210.97.74.34.0Public consumption (y-o-y)1.03.36.56.81.93.33.02.7Gross fixed capital formation (y-o-y)6.2-1.38.914.231.4-22.24.54.5Exports of goods and services (y-o-y)7.77.47.47.68.68.74.33.8Imports of goods and services (y-o-y) 7.76.37.45.111.74.64.03.4Contribution to GDP growth:Domestic demand (y-o-y)3.31.23.97.711.3-1.73.23.0Inventories (y-o-y)-0.3-0.20.3-0.3-0.10.00.10.0Net exports (y-o-y)-0.51.51.05.1-3.17.31.31.3Contribution to potential GDP growth:Total Labour (hours) (y-o-y).0.73.20.72.42.42.32.3Capital accumulation (y-o-y).1.01.71.52.61.11.11.2Total factor productivity (y-o-y).1.51.71.71.71.61.51.4Output gap-0.1-1.20.8-1.8-0.50.0-0.3-0.9Unemployment rate6.96.54.73.83.53.13.02.9GDP deflator (y-o-y)2.12.32.32.05.35.33.62.5Harmonised index of consumer prices (HICP, y-o-y)2.12.91.20.76.15.62.82.3HICP excluding energy and unprocessed food (y-o-y)1.82.11.30.76.25.82.92.5Nominal compensation per employee (y-o-y)2.93.33.44.13.11.52.73.2Labour productivity (real, hours worked, y-o-y)1.61.80.69.24.11.4-0.6-0.5Unit labour costs (ULC, whole economy, y-o-y)1.62.73.4-4.81.12.42.22.9Real unit labour costs (y-o-y)-0.50.41.0-6.7-3.9-2.7-1.40.3Real effective exchange rate (ULC, y-o-y)0.30.71.8-4.9-2.5-4.2-2.20.4Real effective exchange rate (HICP, y-o-y)1.4-0.20.1-0.8-2.71.9..Net savings rate of households (net saving as percentage of net disposable income)........Private credit flow, consolidated (% of GDP)12.29.88.08.86.3...Private sector debt, consolidated (% of GDP)140.0163.7131.8132.5120.3...of which household debt, consolidated (% of GDP)46.857.752.258.455.0...of which non-financial corporate debt, consolidated (% of GDP)93.2106.079.674.165.3...Gross non-performing debt (% of total debt instruments and total loans and advances) (1)1.71.62.52.31.7...Corporations, net lending (+) or net borrowing (-) (% of GDP)........Corporations, gross operating surplus (% of GDP)29.431.336.740.341.4...Households, net lending (+) or net borrowing (-) (% of GDP)........Deflated house price index (y-o-y)13.5-0.93.73.81.2-0.4..Residential investment (% of GDP)7.44.13.74.44.13.8..Current account balance (% of GDP), balance of payments-5.3-3.84.05.9-3.90.90.00.2Trade balance (% of GDP), balance of payments-1.61.414.519.911.416.1..Terms of trade of goods and services (y-o-y)-0.10.00.50.1-0.10.30.30.0Capital account balance (% of GDP)2.31.31.21.51.51.5..Net international investment position (% of GDP)30.610.767.298.483.371.6..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)86.8168.7184.5173.8165.6160.6..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)452.3698.9504.4513.5434.7427.8..Export performance vs. advanced countries (% change over 5 years)..15.615.36.820.1..Export market share, goods and services (y-o-y)-0.72.36.1-10.2-6.17.50.70.1Net FDI flows (% of GDP)-154.7-77.5-63.5-74.5-0.4-12.3..General government balance (% of GDP)-2.9-3.2-0.7-7.6-5.5-4.9-4.3-3.9Structural budget balance (% of GDP)..-1.1-6.7-5.3-4.9-4.2-3.5General government gross debt (% of GDP)66.866.150.953.951.650.452.052.6forecast 
 
 
 
   
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks  for  Malta  over  the  short,  medium  and 
long  term. 
It  follows  the  multi-dimensional 
approach  of  the  European  Commission’s  2023 
Debt Sustainability Monitor, updated based on the 
Commission 2024 spring forecast. 

from  a  still  favourable  but  declining  snowball 
effect,  notably  thanks  to  the  impact  of  Next 
Generation EU. Finally, government gross financing 
needs  are expected  to  stabilise by  the  end  of  the 
projection period in 2034, reaching around 11% of 
GDP, i.e. close to the average over 2024-2025. 

Government 

(Table A21.2) (112). 

1  –  Short-term  risks  to  fiscal  sustainability 
low.  The  Commission’s  early-detection 
are 
indicator  (S0)  does  not  point  to  short-term  fiscal 
risks 
gross 
financing  needs  are  expected  to  increase  around 
11%  of  GDP  on  average  over  2024--2025 
(Table A21.1, Table 1). 
markets’ 
perceptions  of  sovereign  risk  remain  positive,  as 
confirmed  by  the  CDS  spread  and  the  medium-
grade ‘A2/A-/A+’ rating that the three major rating 
agencies assigned to Maltese government debt. 

Financial 

2  –  Medium-term  fiscal  sustainability  risks 
appear medium.   

The DSA baseline shows that the government 
debt ratio is expected to increase slightly but 
remain  below  60%  of  GDP  in  the  medium 
term  (at  around  56%  of  GDP  in  2034) 
(Graph 1,  Table  1) (113).  The  assumed  structural 
primary  deficit  (excluding  changes  in  cost  of 
ageing)  of  2.9%  of  GDP  as  of  2024  appears 
plausible  compared  to  past  fiscal  performance 
(Table  A21.2) (114).The  debt  decline  also  benefits 

(112) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of fiscal and financial-
competitiveness indicators that have proven to be a good 
predictor of emerging fiscal stress in the past.  

(113) The assumptions underlying the Commission’s ‘no-fiscal 

policy change’ baseline include in particular: (i) a structural 
primary surplus, before changes in ageing costs, of 2.9% of 
GDP from 2024 onwards; (ii) inflation converging linearly 
towards the 10-year forward inflation-linked swap rate 10 
years ahead (which refers to the 10-year inflation 
expectations 10 years ahead); (iii) the nominal short- and 
long-term interest rates on new and rolled over debt 
converging linearly from current values to market-based 
forward nominal rates by T+10; (iv) real GDP growth rates 
from the Commission 2024 spring forecast, followed by the 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10 (average of 4.5%); (v) ageing costs in line with the 
2024 Ageing Report (European Commission, Institutional 
Paper 279, April 2024). For information on the methodology, 
see the 2023 Debt Sustainability Monitor (European 
Commission, Institutional Paper 271, March 2024). 

(114) This assessment is based on the fiscal consolidation space 

indicator, which measures the frequency with which a tighter 
fiscal position than assumed in a given scenario has been 
observed in the past. Technically, this consists in looking at 
the percentile rank of the projected SPB within the 

four 

The  baseline  projections  are  stress-tested 
deterministic 
alternative 
against 
scenarios to assess the impact of changes in 
key  assumptions  relative  to  the  baseline 
(Graph 1). For Malta, the debt ratio would be lower 
than  under  the  baseline  only  under  the  historical 
structural  primary  balance  (SPB)  scenario  (i.e.  the 
SPB  returns  to  its  historical  15-year  average  of     
-0.2% of GDP). Under this scenario, the debt ratio 
is about 19 pps. of GDP higher than the baseline in 
2034. Otherwise, all the other stress test scenarios 
would  lead  to  higher  debt  compared  to  the 
baseline, with similar adverse developments under 
the  lower  structural  primary  balance  scenario  (i.e. 
the  projected  cumulative improvement  in the  SPB 
over 2023-2024 is halved) and under the adverse 
interest-growth  rate  differential  scenario  (i.e.  the 
rate  deteriorates  by  1  pp. 
interest-growth 
compared with the baseline). Under both scenarios, 
the debt ratio that would be higher than under the 
baseline  by  around  4  pps.  of  GDP  in  2034.  The 
smallest  adverse  impact  is  projected  under  the 
financial  stress  scenario 
rates 
temporarily  increase  by  1  pp.  compared  with  the 
baseline),  where  the  debt  ratio  would  only  be 
marginally higher than under the baseline.  

interest 

(i.e. 

to 

plausible 

The  stochastic  projections  indicate  medium 
risk,  pointing  to  the  low  sensitivity  of  these 
projections 
unforeseen 
events  (115). These stochastic simulations indicate 
about  59%  probability  that  the  debt  ratio  will  be 
higher  in  2028  than  in  2023,  implying  low  risks 
given  the  current  low  debt  level.  In  addition,  the 
uncertainty 
the  baseline  debt 
projections  is  moderate,  as  measured  by  the 
difference  between  the  10th  and  90th  debt 
distribution  percentiles 
time 
(Graph 2).  

five  years’ 

surrounding 

in 

distribution of SPBs observed in the past in the country, 
taking into account all available data from 1980 to 2022. 

(115) The stochastic projections show the joint impact on debt of 

10,000 different shocks affecting the government’s 
budgetary position, economic growth, interest rates and 
exchange rates. This covers 80% of all the simulated debt 
paths and therefore excludes tail events. 

70 

 
 
 
 
 
risk-mitigating  factors 

4  –  Finally,  several  additional  risk  factors 
need to be considered in the assessment.  On 
the one hand, risk-increasing factors are related to 
the  large  share  of  short-term  debt.  On  the  other 
hand, 
include,  Malta’s 
positive  international  investment  position,  a  high 
share  of  domestically-held  debt,  and  a  sharp 
decrease  in  both  gross  and  net  debt  ratios 
the 
between  2010  and  2022. 
structural  reforms  under  the  NextGenerationEU 
(NGEU)/Recovery  and  Resilience  Facility  (RRF),  if 
fully  implemented,  could  have  a  further  positive 
impact  on  GDP  growth  in  the  coming  years,  and 
therefore  help  to  mitigate  debt  sustainability 
challenges. 

In  addition, 

3  –  Long-term  fiscal  sustainability  risks 
appear  overall  high.  This  assessment  is  based 
on  the  combination  of  two  fiscal  gap  indicators, 
capturing  the  required  fiscal  effort  to  stabilise 
debt  (S2  indicator)  and  bring  to  60%  of  GDP  (S1 
indicator) over the long term (116). This assessment 
is  driven  mostly  by  the  projected  increase  in 
ageing  costs  and 
initial 
budgetary  position.  These  results  are  conditional 
on the country maintaining a sizeable SPB over the 
long term. 

the  unfavourable 

indicator  points  to  high  fiscal 
The  S2 
sustainability  risks.  The  indicator  shows  that, 
relative  to  the  baseline,  the  SPB  could  relax  its 
fiscal position by 1.5 pps. of GDP in 2025 and still 
ensure  debt  stabilisation  over  the  long  term.  This 
result  is  driven  by  the  projected  increase  in 
ageing-related  costs  (contribution  of  6.3 pps.  of 
GDP)  and  the  unfavourable 
initial  budgetary 
position (3.2 pps.). Ageing costs’ developments are 
primarily  driven  by  the  projected  increase  in 
pensions  (3.1  pps.)  as  well  as  health  care  and 
long-term care spending (together 3.3 pps.) (Table 
A21.1,  Table 2).  While  a  number  of  measures  to 
improve  the  efficiency  of  the  health  care  system 
are  being  implemented,  additional  measures  may 
be  required  to  improve  the  efficiency  of  the 
Maltese  long-term  care  system  and  its  fiscal 
sustainability. 

The  S1  indicator  points  to  medium  fiscal 
sustainability risks. The indicator shows that the 
country  would  need  to  improve  its  fiscal  position 
by 4.6 pps. of GDP to bring debt to 60% of GDP by 
is  mainly  driven  by  the 
2070.  This  result 
unfavourable 
position 
(contribution of 2.7 pps. of GDP) and the increase 
in 
expenditure 
(contribution of 2.1 pps.) (Table A21.1, Table 2).  

ageing-related 

budgetary 

public 

initial 

the 

(116)The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2025 that would be required 
to stabilise public debt in the long term. It is complemented 
by the S1 indicator, which measures the permanent SPB 
adjustment in 2025 to bring the debt ratio to 60% by 2070. 
For both the S1 and S2 indicators, the risk assessment 
depends on the amount of fiscal consolidation needed: ‘high 
risk’ if the required effort exceeds 6 % of GDP, ‘medium risk’ 
if it is between 2% and 6% of GDP, and ‘low risk’ if the effort 
is negative or below 2% of GDP. The overall long-term risk 
classification combines the risk categories derived from S1 
and S2. S1 may notch up the risk category derived from S2 if 
it signals a higher risk than S2. See the 2023 Debt 
Sustainability Monitor for further details. 

71 

 
 
 
 
 
 
 
 
 
Table A21.1: Debt sustainability analysis - Malta  

Source: Commission services. 

Table A21.2:Heat map of fiscal sustainability risks Malta  

Source: Commission services. 

72 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)53.951.650.452.052.853.253.453.753.954.254.554.955.456.0Changes in the ratio1.7-2.3-1.21.60.80.40.20.20.30.30.30.40.40.6of whichPrimary deficit6.54.63.83.13.02.72.52.42.32.32.22.22.22.2Snowball effect-5.6-5.6-4.1-2.6-2.3-2.3-2.3-2.2-2.1-2.0-1.9-1.8-1.7-1.5Stock-flow adjustments0.8-1.3-0.91.20.10.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)15.28.69.711.210.310.110.110.110.210.210.310.410.610.7S1S2Overall index  (pps. of GDP)4.69.6of which Initial budgetary position2.73.2Debt requirement-0.2Ageing costs2.16.3of which    Pensions0.83.1     Health care0.81.6     Long-term care0.81.7Education-0.3-0.1Table 2. Breakdown of the S1 and S2 sustainability gap indicators303540455055606520212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p9030405060708020212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2024-2028MedianBaseline