Malta Budget Highlights 2021

The economic impact of the COVID-19 pandemic is reflected in the local
economy as it is expected that a deficit of around 9.4% of the GDP will be
registered for 2020 following an increase in the Government’s expenditure to
fund measures and initiatives to support local communities affected by the
pandemic. Government debt is forecasted to increase to approximately 55%
of the GDP by the end of 2020.

The GDP is expected to contract by around 7.4% in real terms for the current
year and recover by around 5% in 2021. Consecutively, it is forecasted that
the deficit will improve to 5.9% and Government debt continue to increase to
approximately 59% in 2021.

Figures published by Eurostat, the statistical office of the European Union as
at August 2020 show that the euro area seasonally-adjusted unemployment
rate has reached 8.1% whilst the EU unemployment rate reached 7.4%.
Malta’s unemployment rate as at August 2020 was of 4.1%.

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