Malta’s geographic position between Europe and North Africa makes it an intermediary between the EU and African States economically. Malta joined the European Union in 2004 and adopted the Euro on 1 January 2008.
With an area of just 316sq km, the Maltese Archipelago is one of the smallest in the world. Yet it is also one of the densest, with over 417,000 residents. Only the three largest islands – Malta, Gozo and Comino – are inhabited.
Malta has low rate of unemployment when compared to other European countries and its financial services industry has grown exponentially in recent years. From 2005 to 2007, Malta recorded an average GDP growth rate of 3.7%, making it one of the fastest-growing economies in the EU. In 2008-2009 it escaped significant damage from the international banking and financial crisis. The Maltese banking sector is well regulated and quite conservative. It is one of the soundest in Europe and has weathered the European debt turmoil relatively well with no need for capital injections. Investments are centered largely on the indigenous real estate market and lending is not highly leveraged.
In addition, Malta continued to attract foreign investment due to its openness to business, especially in areas such as software development, investment funds, remote gaming, shipping and generic pharmaceuticals. Tourism has also boomed and Malta’s aviation register saw sharp growth over the past 12 months. At the same time, the Maltese government has sought to dispose of state enterprises such as the former Malta Shipyards which ran at a loss for decades and has embarked on the restructuring of others which are considered to have a strategic geo-political value such as the country’s national airline, Air Malta. . The most recent GDP real growth rate stands at 2.1% (2011 est.)
The World Economic Forum (WEF) classifies the Maltese economy as “innovation driven” together with countries such as Australia, Germany, Singapore, Sweden, the UK and the US. In its Global Competitiveness Report for 2012/2013 it ranked Malta 47th out of 144 countries. Malta gets particularly high marks for innovation and for its financial markets.
Main trading partners include the UK, Italy, France, USA, Germany and Libya.
During the period of rebellion in Libya that began in February 2011, Malta played an important role in supporting evacuation of third-country nationals; coordinating humanitarian aid to the people of Libya and providing general assistance to forces of nations involved in enforcement of UN Security Council Resolutions 1970 and 1973.
Malta is a founding member of the World Trade Organization (WTO) and hence Malta’s trading policy is regulated by the agreements emanating from it. In this respect, a number of amendments to trading laws have been made to align local legislation with policies of the WTO.