In our collective psyche, the troubles of the distant Middle East often feel like a digital noise, filtered through the blue haze of our surrounding sea.

However, the luxury of distance has evaporated in today’s world as we have experienced even in recent years. The geography of our islands no longer grants immunity from global tremors.

The escalation of the Iran War, from the initial joint strikes on 28 February to the catastrophic closure of the Strait of Hormuz, has proven that while we may live on an island, we do not live in a vacuum. News coming in is not encouraging. The negotiations between the US and Iran in Pakistan have yielded no concrete way forward and Trump is now moving ahead to implement a total blockade in the Strait of Hormuz. This means that things are escalating further and it is very plausible to expect negative economic effects for at least the medium-term as a short-term solution is now rather difficult to envision.

The ripple effects of the conflict are no longer theoretical. They are manifesting in data points that are, or shortly will, directly impact everything and everyone.

The latest developing risk is the Jet Fuel shortage. Industry analysts warn of a systemic jet fuel shortage hitting the EU by May. For a tourism-dependent island, the threat of flight cancellations (already being considered by major carriers like Ryanair) is a direct hit to our connectivity. Without jet fuel, our vital “bridge” to the mainland effectively vanishes, also disrupting the supplies we rely on from air transport.

On the other hand the Maltese government remains the only one in the EU to have frozen fuel and energy prices through subsidised administered pricing, meaning that the fiscal cost is very likely to keep mounting, straining further our public finances. The recent DBRS credit agency report on Malta also highlight this point when saying: “Furthermore, potentially higher-for-longer global energy prices are a risk factor for the government’s fiscal balance given its fixed price energy policy. Maintaining the current freeze on domestic energy prices would necessitate higher energy subsidies, thereby adding to budgetary pressures.”

Malta is an import-dependent economy. The disruption of the Strait of Hormuz and the diversion of shipping routes around the Cape of Good Hope have added weeks to transit times and spiked freight costs. This isn’t just about delays, it affects fertilizer inputs for agriculture and raw materials for our manufacturing sector.

Despite subsidies, “imported inflation” is leaking into the local market. As shipping and production costs rise globally, the price of food and essential commodities in Maltese supermarkets will be felt. The European Central Bank has already revised its 2026 inflation projections upward, warning that a prolonged conflict could tip the overall Eurozone economy in recession.

In my humble view, in a world going from one crisis to another, we can no longer afford the “business as usual” approach where we assume the state will always be the ultimate shock absorber, which is the downside of subsidies beyond the peak time of a crisis.

Beyond dealing with the immediate Iran war induced crisis at hand we need to look ahead and take resilience more seriously. True resilience requires a fundamental shift in how we live, work, and plan for the future.

We must accelerate the transition from “subsidised fossil fuels” to “sovereign renewables”. Resilience means having a grid that isn’t tethered to the volatility of a Middle Eastern strait. Similarly, supporting local vertical farming and boutique agriculture isn’t just a “green” trend; it’s a national security imperative to ensure our food supply is not 100% at the mercy of global shipping lanes.

Malta’s implementation of the EU’s Critical Entities Resilience (CER) Directive must be prioritised. This involves “all-hazards” planning – meaning every major provider of water, digital services, gases and transport must have a redundant strategy for “Black Swan” events, such as a total cessation of shipping for 90 days.

Resilience also starts at home. In a world of volatile prices and “just-in-time” supply chains, the “business as usual” mindset is a liability. We must move from a culture of consumption to one of conservation, treating water and energy as precious, finite assets.

At a national and industrial level, we need to understand if and how we can beef up our dedicated strategic reserves of jet fuel and essential commodities to bridge any supply gaps created by global conflicts.

Our historic insular mindset was about looking inward to stay safe. The resilience mindset is about looking outward to stay prepared. By acknowledging that the smoke over the Persian Gulf eventually reaches our runways and our dinner tables, we can stop reacting to crises and start out-planning for when the next one will hit us. Many times I get the sensation that our baseline is based on the hope that our business-as-usual mindset will somehow carry us through – that by doing nothing, things will resolve themselves while we ride out the storm, hoping that our war chest will be enough to see us through and that nothing will derail our economic growth.

The post Resilience first appeared on The Malta Business Weekly.

Chapter 2 documents the development and implementation of a new analytical framework designed to strengthen the Council’s monitoring toolkit. In a small, highly open economy like Malta’s, where market dynamics shift rapidly, the MFAC identified the need for a structured instrument to synthesise diverse indicators into a coherent assessment. The resulting “heatmap” serves as both an early warning system and a monitoring tool to detect emerging macroeconomic and sectoral imbalances.

The methodology involves evaluating 27 distinct indicators across five thematic blocks – Prices and Competitiveness, Labour Market, External Balances, Credit and Financial, and Business Trends – against their long-run averages from 2010 onwards. By utilising Z-scores (measuring standard deviations from the mean), the Council can visually identify “heat” in the economy; large positive deviations appear in shades of orange, while negative deviations appear in blue. This iterative tool allows for a timely, quarterly assessment of whether the economy is operating at, above, or below its historical norms.

So far, the critical insights developed from this tool are that the Maltese economy continues to operate above its long-term historical average, but the “heat” of the rapid post-pandemic expansion is visibly cooling. This suggests a natural transition toward a more mature stage of the business cycle where growth rates align more closely with historical norms. Moreover, indicators signal persistent and extreme structural tightness in the labour market. Most importantly, while nominal wages increased by 4.1% in 2025, labour productivity growth has remained subdued. This has pushed Nominal Unit Labour Costs (ULCs) above their long-term average, posing a direct threat to Malta’s international price competitiveness. Finally, while house price inflation remains above historical norms, it is showing signs of deceleration. Crucially, building activity in Q3 2025 stood below its long-term average, indicating a property market transitioning toward more moderate expansion.

Chapter 3 provides a comprehensive examination of the evolution and composition of general government expenditure in Malta using the Classification of the Functions of Government (COFOG) framework. This international statistical classification groups spending by purpose such as, health, education, and social protection, rather than just administrative categories, offering deeper insight into how public resources are prioritised over time.

The analysis spans the period from 2000 to 2024 and applies a three-effect decomposition framework to disentangle the drivers of spending growth. This framework distinguishes between the GDP effect (spending increasing in line with economic scale), the government size effect (changes in the overall fiscal footprint relative to GDP), and the structural allocation effect (deliberate shifts in spending priorities across different functions). Additionally, the chapter categorises expenditure by its economic nature – rigid (salaries and pensions), operational (intermediate consumption), and discretionary (capital investment) – to assess the government’s flexibility in responding to future fiscal pressures.

The critical insights derived include that social protection, health, and education collectively accounted for 52.1% of total expenditure in 2024. Within social protection, old-age spending (pensions) is the dominant component, totalling €1,366.4 million in 2024 – a reflection of Malta’s demographic shift and a 49% increase in pension beneficiaries since 2010. Moreover, the economic affairs category recorded the fastest growth over the period, reaching 20.3% of total expenditure by 2024. This surge was primarily driven by transport infrastructure investment and energy price subsidies introduced from 2022 onwards.

A three-effect decomposition analysis revealed that the vast majority of spending increases were simply proportional to the expansion of the economy. Interestingly, the overall “size of government”, relative to the economy, actually declined over the period, with the expenditure-to-GDP ratio standing at 37.4% in 2024 compared to earlier years where it fluctuated between 40% and 42%. One has to see if this trend will continue in 2024, as 2025 has seen a steep acceleration of government spending.

Another insight is that intermediate consumption (the cost of running the day-to-day business of government) surged from 12.2% of the budget in 2000 to 19.8% in 2024. This suggests a growing portion of the budget is becoming “locked-in” to operational demands and outsourced contracts.

Finally, unfortunately government R&D expenditure remains a systemic weakness, hovering at less than 0.2% of GDP, drastically trailing the EU average of 0.7%.

In conclusion the MFAC warns that Malta’s current fiscal health relies heavily on strong revenue growth fuelled by domestic demand. As the new EU economic governance framework introduces stricter limits on net expenditure growth, the Council emphasises two strategic imperatives. First, the need to rebalance the growth model by transitioning away from population-driven growth toward a high-value, export-led, and productivity-driven model. Secondly, by enhancing the quality and efficiency of government spending, fiscal space can be preserved by ensuring that expenditure-based consolidations prioritise productive capital investment rather than non-productive recurrent expenditure.

The post Macroeconomic surveillance and fiscal evolution in Malta first appeared on The Malta Business Weekly.

I believe it is useful to understand how Malta’s public finance progressed in the last six years, from the last year before Covid in which we had a surplus, that is 2019, all the way to 2025.

The government’s revenue grew by roughly €3.18 billion over these six years. The engine of this growth has shifted from corporate tax in the early years to Social Security and VAT in the later years.

Year-on-Year Government Revenue (Millions of €)

As can be seen above, Government Revenue plummeted in 2020 due to the pandemic. The 2021 surge was not just recovery, but the start of a massive increase in Income Tax receipts from the financial and gaming sectors. Then in the 2023-2024 period VAT and Income Tax jumped significantly. As wages rose and prices for goods increased, the government’s “cut” grew proportionally.

Now in 2025, for the first time, Income Tax actually dipped (-€51m) while Social Security (+€148m) became the primary growth government revenue driver, likely indicating that while corporate profits may have stabilised (or possibly dipped), the labour market (employment volume) remained strong.

On the other hand, Government Expenditure has scaled more aggressively, rising from €4.88 billion to €8.90 billion. The primary culprit is Programmes and Initiatives, which now consumes nearly half of the entire budget. The Programme & Initiatives expenditure category acts as a “catch-all” for the government’s direct spending on social services, subsidies, and national obligations that are not related to civil service wages or the day-to-day running of a specific department.

Year-on-Year Government Expenditure Shifts (Millions of €)

As can be seen above between 2022 to 2025, the Programmes and Initiatives category exploded. This includes the energy and fuel subsidies and social benefit increases. Personal Emoluments (civil service wages) grew by 62% since 2019. In 2025 alone, this rose by €149m due to new collective agreements across health and education. While Interest payments stayed flat or fell until 2022, but as debt crossed the €10 billion mark in a higher-interest environment, the cost to simply service that debt (interest) has jumped 70% in just three years (2022 to 2025). In 2019, the government spent roughly €13.4 million per day. By 2025, that figure rose to €24.4 million per day.

The government finance 2025 data released on 27 March shows a worrying trend as total overall government revenue growth is slowing (+2.7%) while Expenditure growth is accelerating (+7.3%), as Income tax revenue has not grown in 2025. In 2025 government revenue has grown almost entirely dependent on Social Security contributions from a growing workforce and VAT.

Now some analysis of the sustainability of Malta’s public finances, in 2025 and in the near future, considering the present geopolitical scenario.

Malta’s economic reporting is characterised by significant GDP upward revisions as initial quarterly estimates are replaced by more comprehensive annual data. For 2023, the nominal GDP was initially reported at approximately €19.37 billion, only to be revised upward by 6.6% to a final figure of €20.65 billion. A similar pattern emerged for 2024, where the first provisional estimate of roughly €21.5 billion was eventually adjusted to €23.10 billion, representing a 7.4% increase.

As of the March data release, the provisional GDP for 2025 is estimated at €24.53 billion. If we apply the average revision rate from the previous two years (approximately 7%), the final GDP for 2025 is likely to be revised toward €26.25 billion by the time the final accounts are settled. Based on the NSO’s reported Consolidated Fund deficit of €823.9 million, this adjusted economic denominator would result in an annual deficit of 3.14% of GDP. This figure is particularly significant as it brings Malta remarkably close to the 3% threshold mandated by the EU’s Stability and Growth Pact, suggesting that while the absolute deficit increased in 2025, the sheer scale of economic expansion continues to provide a crucial buffer for national fiscal sustainability.

Looking forward, one has to consider that it is very likely that government expenditure would have to increase further in 2026, as it will have to pay higher fuel and energy subsidies as international oil and gas prices have soared due to the Iran war. In the meantime, if Malta has the predicted real economic growth rate of 3.8% in 2026 plus an inflation of 3.5% the nominal GDP for 2026 would be approximately €28 billion. If we were to assume that Malta would hit a higher deficit level of around €1 billion in 2026 (mainly due to increased fuel and energy subsidies), we would hit a deficit to GDP ratio of 3.5%-3.6%, which would delay our trajectory from hitting the 3% level.

Malta’s fiscal narrative between 2019 and 2025 reveals a sophisticated paradox: a government whose daily spending has nearly doubled – from €13.4 million to €24.4 million – yet remains anchored by an economy that consistently outpaces its own preliminary growth estimates. The transition from 2019 to 2025 highlights a shift toward a high-spending, subsidy-heavy model. However, the 2025 data signals a structural pivot that warrants caution. For the first time in this period, Income Tax revenue has dipped, leaving the state increasingly dependent on VAT and Social Security contributions from an expanding workforce to fund its obligations.

With Programmes and Initiatives now consuming nearly half the budget and debt-servicing costs jumping 70% in three years, the margin for error has narrowed. Looking ahead to 2026, rising geopolitical energy costs are expected to strain Malta’s fiscal sustainability, making it increasingly dependent on maintaining strong real growth (projected at 3.8%) to keep pace with mounting expenditure.

The 2026 fiscal outlook suggests that Malta is entering a high-stakes race between economic expansion and exogenous shocks. While a projected €28 billion nominal GDP provides a formidable defence, any further escalation in geopolitical energy costs could push the deficit toward €1 billion, potentially stalling the nation’s trajectory toward fiscal consolidation.

The post Malta’s fiscal tightrope first appeared on The Malta Business Weekly.

In economic theory, subsidies are primarily viewed as shock absorbers. When a sudden, exogenous shock (like a war or a pandemic) hits, the “Temporary vs. Permanent Shock” framework suggests that governments should intervene to prevent a “price cliff”. By absorbing the initial blow, the state prevents a downward spiral of reduced consumer spending and business insolvency.

However, subsidies are not intended to remain in perpetuity. According to the Principle of Market Signals, prices serve as essential information. When the state permanently masks the true cost of a resource:

• Incentives vanish: Consumers have no reason to conserve energy;
• Innovation stalls: Businesses feel no pressure to pivot to more efficient technologies; and
• Fiscal drag: What was meant to be a temporary bridge becomes a permanent weight on the national debt, reducing the country’s ability to respond to the next crisis.

Malta’s commitment to price stability has come at a significant fiscal cost. Below is the breakdown of the estimated expenditure on energy and fuel subsidies alongside the average spot price of Brent crude oil for those years.

This means that over four years we have spent €1.17 billion in energy and fuel subsidies.

Which brings about the important point of resilience. We are living in an era of “polycrisis”, where the world appears to hop from one geopolitical or environmental catastrophe to another. In this reality, a country’s greatest asset is resilience. Resilience is not just the ability to spend; it is the ability to have a deep and large enough “war chest” available exactly when the peak of a crisis hits.

To maintain this fiscal firepower, a strategic shift based on sound economic principles is needed. Both the IMF and the Central Bank of Malta have advocated for an “exit strategy” – moving away from universal, untargeted subsidies toward a more flexible model. This involves limiting or reducing subsidies during “peace” periods – times when energy prices are lower or the crisis is not at its peak.

Reducing the subsidy during milder periods serves two critical purposes:

1. Fiscal replenishment: It allows the government to reduce the deficit and build reserves, ensuring that when a massive shock (like the 2026 Iran war) occurs, the state has the financial strength to protect the most vulnerable while still managing to keep fiscal sustainability.
2. The inducement for change: Removing the “artificial safety net” during stable times acts as a powerful economic inducement. When businesses and households face even a gradual return to market-reflective pricing, the Return on Investment (ROI) for renewable energy and energy-efficient retrofitting becomes far more attractive.

The economic sense of subsidies lies in their timing. Using them to blunt the sharpest edge of a war-induced spike is sound social policy; using them to hide the reality of a changing energy landscape during periods of relative calm is a missed opportunity. By tapering support when the pressure is lower, Malta can build a more resilient economy – one that is both financially prepared for the next storm and equipped to outrun it.

The post The economic sense of subsidies first appeared on The Malta Business Weekly.

The central takeaway for any local entrepreneur is the remarkable strengthening of Maltese household balance sheets in the post-pandemic era. The survey reports that median net wealth has surged to €376,350, nearly doubling since 2010.

For businesses, this indicates a domestic consumer base with significantly more “staying power.” Despite global inflation, Maltese households have seen their gross worth rise, largely driven by the appreciation of real assets, which account for nearly 90% of total household wealth. This solid asset base provides a buffer against external shocks, suggesting that while global wars may disrupt supply chains, the local appetite for quality goods and services remains backed by substantial equity.

The present Iran war and wider Middle Eastern tensions typically send shockwaves through energy markets. However, the HFCS reveals a unique “Maltese Advantage” that businesses can leverage. The study notes that Maltese households were largely shielded from European energy price surges due to fixed domestic tariffs. In 2022, median monthly energy expenditure stood at a modest €60.

This price stability is a double-edged sword. While it protects current disposable income, the study highlights a proactive shift: households are planning a median investment of €6,700 in energy-efficient measures, with 68.4% of those planning to invest focusing on new energy sources like solar panels and heat pumps.

The war in the Middle East will likely accelerate the global transition to renewables. Maltese businesses should align with this “Green Pivot.” Whether you are in construction, retail, or consulting, the data shows a clear, funded intent among consumers to decouple from volatile fossil fuels. Adapting your business model to support, supply, or integrate energy-efficient solutions is no longer a niche strategy – it is a response to a documented national trend.

Perhaps the most significant strategic insight for Maltese businesses from the HFCS lies in the structural divide revealed between Maltese-born and foreign residents. The survey notes that foreign-headed households now represent 10.5% of the sample – a segment that is younger, highly educated (43% tertiary attainment) and predominantly renters (82.3%).

While their median income is comparable to locals (€35,532 vs €37,868), their wealth profile is radically different. Maltese households are asset-rich and often debt-sustainable, whereas the growing foreign population has a median wealth of just €22,994, compared to the local median of nearly €400,000.

Businesses must recognise that they are serving two distinct demographics. One is an older, asset-wealthy cohort looking for wealth preservation and energy upgrades. The other is a younger, mobile, and educated workforce with good income but low assets, likely seeking premium consumer experiences, rental-friendly services, and digital-first solutions.

With nearly 95% of foreign households reporting employee income, this group is the backbone of the private sector labour force. In a time of war and global instability, ensuring the retention of this highly educated talent pool is vital for business continuity.

The HFCS study notes that while real estate remains the king of Maltese wealth, financial asset portfolios are becoming more skewed toward the wealthy. For the broader population, bank deposits remain the primary saving vehicle.

In a world where war can lead to currency fluctuations and market volatility, Maltese households’ reliance on domestic real estate provides a form of “forced stability.” However, for businesses, this concentration of wealth in property means that liquidity can sometimes be tight. The survey shows that while overall debt is sustainable (debt-to-asset ratio of 13.7%), lower-wealth households are more financially constrained.

The “forced stability” provided by real estate creates specific structural challenges for businesses. The HFCS study reveals that while Maltese households have grown significantly wealthier, this wealth is heavily “trapped” in non-liquid assets. Real assets account for nearly 90% of total household assets. The main residence alone constitutes 61.8% of net wealth. Because such a vast portion of wealth is tied up in property, the “wealth effect” (where people spend more because their assets have increased in value) may be more psychological than liquid. Businesses, particularly in retail and high-end services, must recognise that their customers are “asset-rich but cash-constrained.” In times of global market volatility, consumers may hesitate to spend disposable income, fearing that their primary store of wealth – their home – is not easily accessible for emergency funds. In fact the HFCS study provides a stark metric for the financial constraints mentioned: the Net Liquid Assets-to-Income ratio. For the wealthiest quintile, liquid assets represent 131.6% of their annual income, giving them a massive buffer against shocks. In contrast, for the least wealthy households, this ratio drops to just 25.1%.  This means the bottom 20% of the population has only about three months’ worth of income held in liquid forms. For businesses, this segment is highly vulnerable to “inflationary shocks” caused by war or supply chain disruptions. Any increase in the cost of essential goods will almost immediately translate into a total cessation of discretionary spending for this group.

Moreover while the overall debt-to-asset ratio is low at 13.7%, the income-based indicators tell a more cautionary story for business strategy. The median mortgage debt-to-income ratio for the population is 194.8%. However, for the lowest wealth quintile, this surges to 308.6%. This high leverage among less wealthy households means that even small increases in living costs or a minor downturn in the labour market (which can happen during global unrest) could force these households into “survival mode.” Businesses catering to the middle and lower-wealth segments should prepare for high sensitivity to pricing and an increased demand for credit-based purchasing or instalment plans.

The HFCS provides a rare regional breakdown that Maltese businesses should use to optimize their footprint. The Western region and Gozo/Comino emerged as the wealthiest areas, with median asset values exceeding €500,000. Conversely, the Southern Harbour region reports the lowest median wealth, roughly half that of the top regions.

This means that expansion and high-end service offerings should gravitate toward the West and Gozo, where the “wealth effect” of property appreciation is most potent. Retail and essential service businesses may find more volume but lower margins in the southern harbour regions.

Overall, the 2023 HFCS paints a picture of a nation that has used the post-pandemic period to fortify its financial house. Maltese businesses are operating in a landscape where consumers are wealthier and interested in investing in renewable energy. Moreover, there is a rising shift in demographics toward a younger, professional foreign cohort that values services over ownership.

The present Iran war may threaten global supply chains, but the Maltese business that adapts – by leaning into the green transition, catering to the diverse “two-speed” consumer base, and targeting regional wealth – will find itself operating from a position of relative strength. The data shows that the Maltese household is ready to invest in its future; the question is whether Maltese businesses are ready to lead that journey, by being strategically driven and well invested in digitally based efficient processes.

The post Building resilience in an age of global unrest: Lessons from the 2023 Maltese HFCS first appeared on The Malta Business Weekly.

Compensation of Employees is the total remuneration, payable by an employer to an employee in return for work done and includes gross wages and salaries, plus the social contributions (NI) paid by employers.

Gross Operating Surplus & Mixed Income, represents the “leftover” value after labour costs and taxes are paid. It measures the return on capital and the productivity of businesses, whereby the gross operating surplus refers to the profits of business  whilst mixed income is a special term for the income of unincorporated enterprises—basically, the self-employed, small family-run shops and small farmers. It’s called “mixed” because it’s a mix of a “wage” for their labour and a “profit” for their business.

Net Taxes on Production and Imports is the portion of the economic value that goes directly to the state. It is calculated as Taxes minus Subsidies. Taxes includes VAT, excise duties on fuel/tobacco, and various licenses or permits, whilst subsidies are payments from the government to businesses to keep prices low or support specific industries.

 Annual Percentage Change by GDP Income Subcomponent (Nominal)

The development of Malta’s GDP by income between 2022 and 2025 highlights a shift from a profit-led recovery to a wage-led expansion, ending with a tax-driven normalisation in late 2025.

In 2022, compensation of Employees grew at +10.1%, whereby this growth was primarily driven by the return of the hospitality sector. As hotels and restaurants reopened fully, headcount increased significantly. Additionally, the iGaming and ICT sectors began a “war for talent,” pushing up entry-level salaries. On the other hand, Gross Operating Surplus grew by +15.2% in 2022, whereby businesses in tourism and retail saw a massive spike in demand. Crucially, many firms maintained higher price points established during the pandemic while global supply chain costs began to ease in the second half of the year, leading to record profit margins. On the other hand, in 2022, Net Taxes on Production dropped by -18.4%. This sharp decrease was not due to lower tax collection, but rather the government’s massive energy and grain subsidies. Under the income approach, subsidies are “negative taxes.” The hundreds of millions spent to freeze utility prices at 2021 levels mathematically cancelled out much of the VAT and excise revenue.

In 2023, compensation of Employees  grew by +11.2% as inflation became the primary driver here. The high Cost of Living Adjustment (COLA) and the upward revision of the minimum wage contributed to a double-digit increase in the national wage bill. Other the other hand, in 2023 Gross Operating Surplus grew at a slow pace by +9.8% as profit growth began to moderate as the “easy gains” of the 2022 post pandemic reopening faded. Rising labour costs for businesses started to squeeze the margins of small and medium enterprises (SMEs). Finally in 2023, Net Taxes on Production grew by +8.5% as the recovery in this component was seen as private consumption hit new highs. Even with energy subsidies still in place, the sheer volume of VAT collected from record-breaking tourist numbers and local spending turned this figure positive again.

In 2024, compensation of employees grew by +13.4%. This was the highest growth rate in this category for decades. It was fuelled by two factors, the Public Sector Collective Agreements through new deals for nurses, teachers, and civil servants and a continued shortage of labour in the private sector, which forced “off-cycle” pay raises. On the other hand, the Gross Operating Surplus grew by an even slower pace of +6.2% as profits continued to slow. The “wage-push” inflation meant that a larger share of the GDP “pie” was going to workers rather than business owners. On the other hand, in 2024, Net Taxes on Production grew by +12.1%  driven by the Digital Economy with the iGaming and Financial Services sectors contributed heavily to tax revenue through corporate taxes and gaming duties, while the government began a very slight tapering of certain non-essential subsidies.

In 2025, the Compensation of Employees grew by +8.4%, whereby Growth returned to a more sustainable level. However, the labour market remained very tight. Gross Operating Surplus in 2025 grew by an even slower pace of +5.8% and this could have been smaller hadn’t  business profits experience a resurgence in Q4 2025 as the “Wholesale and Retail” and “Transportation” sectors outperformed expectations during the final quarter, helping this component recover from a sluggish start to the year. On the other hand, Net Taxes on Production  in 2025 grew by +10.3% as this saw a massive jump in Q4 2025 (+€201.5 million year-on-year). This was largely a technical and fiscal shift: VAT revenue remained buoyant, but more importantly, the total value of energy subsidies decreased relative to GDP as global energy prices stabilised, causing “Net Taxes” (Taxes minus Subsidies) to shoot upward.

The three-year trend (2023–2025) where Compensation of Employees consistently outpaced Gross Operating Surplus marks a fundamental shift in the Maltese economy as we have moved from a “Profit-Led” model to a “Wage-Led” one. As businesses need to contend with fast rising wages costs, wages are fast eating into profits (Operating Surplus) meaning that Malta’s competitiveness is now under fire. To survive, firms must either innovate (productivity) or raise prices—the latter being difficult to maintain competitiveness. With unemployment at record lows,  the “balance of power” has shifted to the worker. Even as the economy “slows” to more normal levels, wage bills remains high due to the tight labour market. This is great from a social perspective, but it creates a “Margin Trap” for SMEs who cannot easily absorb these costs.

When Compensation of Employees consistently outpaces Gross Operating Surplus, it signals a “profit squeeze” that can create a challenging paradox for future economic health. In the short term, this redistribution of wealth boosts private consumption, as workers have more disposable income to spend, which props up domestic demand. However, from an investment perspective, it can be a red flag. Lower corporate margins mean businesses have less retained earnings to reinvest in new technology, infrastructure, or R&D. If this trend persists without a corresponding leap in labour productivity, Malta risks a “competitiveness trap” where the high cost of doing business deters Foreign Direct Investment (FDI) in favour of cheaper jurisdictions. For future growth to remain sustainable, the economy must transition from being “labour-intensive” to “capital-intensive,” ensuring that high wages are backed by high-value output rather than just a tight labour market.

The recent US & Israel military strikes in the Middle East act as a direct threat to this delicate balance of the mentioned three subcomponents. If Oil prices sustain a leap upwards due to a Strait of Hormuz blockade, Maltese businesses would see an immediate spike in “Intermediate Consumption” (the cost of doing business), as amongst various cost inputs shipping costs will rise. Since, such business would likely not be able pass these costs to customers instantly, their Operating Surplus (Profits) would shrink further. Moreover, higher aviation fuel prices could lead to more expensive flights to Malta and a drop in tourist arrivals effecting negatively the profits of the hospitality sector, which was the main driver of the Q4 2025 gross operating surplus. With regards, Net Taxes on Production, Malta’s “Net Taxes” by end 2025 where high because energy subsidies were tapering off. If global energy prices explode and government maintains its 100% energy subsidy policy, the net taxes could turn negative as the outlay on the energy subsidies increases.

As Malta moves toward the next general election, the above economic analysis serves as a critical warning for policymakers. While the temptation is to enact popular, worker-centric policies is high in a pre-electoral climate, the structural reality of the 2022–2025 period suggests that the “easy” growth of the past is hitting its limits. Politicians must therefore keep in mind that the compensation of employees is already consuming a larger share of GDP growth than corporate profits and further burdens on businesses could stifle the very private investment needed to modernise the economy. Moreover, policies that increase labour costs without giving enough time for businesses and the economy to benefit from the push for digital and technical upskilling risk trapping the country in a cycle of high costs and slow down value-added growth.

Ultimately, while “giving to the workforce” wins votes today, failing to protect the “surplus” that allows businesses to innovate will lead to a slower, less competitive economy tomorrow. Sustainable prosperity requires a balance where labour is fairly rewarded, but capital remains motivated and capable of reinvesting in Malta’s future.

The post The profit squeeze: The needed rebalancing act first appeared on The Malta Business Weekly.

The human cost of this endurance has been staggering. As of this month, conservative estimates indicate that combined military casualties have reached a haunting two million, with Russia alone believed to have suffered more than 1.25 million killed and wounded. On the ground, the state of play is one of brutal, high-tech attrition. The 1,200-kilometre front line remains a scene of various assaults and relentless drone warfare; while Russia has recently claimed marginal gains in the north, Ukraine has successfully pushed back in the south, recently liberating hundreds of square kilometres. Yet, neither side has found the decisive blow.

This is no longer a localised dispute. It is a systemic rupture. It has evolved into a total war on information, where algorithms are as lethal as artillery and mind manipulation has become a tool of statecraft. We have lived through four years of unprecedented geopolitical tension, where the very architecture of global stability has been set ablaze.

If these four years have taught us anything, it is that the European Union had been living in a fool’s paradise. For decades, the EU treated security as a given rather than a responsibility. Europe outsourced its warmth to Russian gas and its safety to the United States. By relying on the NATO umbrella, while simultaneously underfunding its own sovereign capabilities, Europe became a continent of consumers in a world of predators.

The reality of 2026 is uncompromising. The prolonged agony of the Ukraine-Russia war, coupled with the return of a Trump’s presidency, with its scepticism toward traditional alliances, has left the EU with its back against the wall.

The argument against increased defence-spending is well-known: the opportunity cost. Every euro spent on a tank is a euro taken from a classroom, a hospital, or a green innovation lab. Yet, as the Draghi Competitiveness Report starkly highlighted, without security, there is no prosperity. To remain competitive and sovereign, the EU has no real alternative but to integrate further.

The path forward is no longer a matter of “if”, but “how”. To remain relevant in the new geopolitical situation the EU must inevitably look at the birth of a Federalised Europe, moving forward. This would likely mean the removal of unanimity with a shift of Qualified Majority Voting (QMV) to prevent single member vetoes from paralysing the continent and common defence funding, with joint debt issuance to fund a European military industrial base, among others.

This shift toward “Pragmatic Federalism” was the centrepiece of the recent European Industry Summit in Antwerp and the subsequent leaders’ retreat this month. Heads of state from the EU’s core, led by Germany and France, met to negotiate an ambitious Competitiveness Agenda that effectively seeks to transform the EU from a confederation into a federal power. Under this new vision, the Single Market would undergo its most radical evolution since 1992. This includes the creation of a “28th Regime”, a unified legal framework allowing innovative companies to operate across all member states without navigating 27 different sets of national rules. Furthermore, it envisions a fully integrated Energy Union and a Savings and Investment Union, centralising the supervision of financial markets to ensure that European capital stays in Europe to fund European defence.

This drive toward integration is increasingly carving out the possibility of a two-tiered European Union. The recent “E6” summit comprising Germany, France, Italy, Spain, Poland, and the Netherlands, signals the formalisation of a “core” Europe that is willing to bypass the slow-moving consensus of the 27. This first tier would operate as a federal state in all but name, sharing a common defence budget and harmonised fiscal rules. The second tier, consisting of states that cannot or will not follow this pace, would essentially remain in some sort of glorified free-trade area. While this “multi-speed” model prevents the entire bloc from being held hostage by a single veto, it risks turning the EU into an “onion” of varying layers of influence, where those in the outer rings have little to no say in the strategic direction of the continent.

For Malta, the EU’s smallest member state, this federalist shift introduces a radical new dynamic. From an economic perspective, a federalised Europe offers Malta a high-stakes trade-off between stability and competitive edge. On the advantage side, the “28th Regime” and a unified Capital Markets Union would be transformative for Malta’s thriving startup and fintech sectors, allowing local firms to scale across the entire continent without the prohibitive legal costs of navigating 27 different regulatory systems. However, the disadvantages are existential. The shift toward Qualified Majority Voting (QMV) in tax matters – a cornerstone of federalisation – threatens Malta’s sovereign right to set its own corporate tax rates.

For a small, peripheral island that uses fiscal flexibility to compensate for its lack of natural resources and high transport costs, the loss of this “tax tool” could jeopardise the financial services and iGaming industries that underpin a great chunk of its current prosperity. In essence while federalisation may save the European project, for Malta, it risks trading a unique competitive niche for a more stable, yet potentially less lucrative, role as a small cog in a massive federal machine.

As we approach our own General Election, the focus remains a race of who offers the greatest immediate electoral benefits.

Meanwhile, the tectonic plates of the world are shifting beneath our feet. This developing reality leading to the birth of a Federal Europe, will surely affect us all. Yet, our political class continues to “ignore” these existential questions, preferring the safety of local squabbles over the hard truths developing around us.

The post Four years… first appeared on The Malta Business Weekly.

I believe it would serve everyone to understand the trajectory of our inbound tourism market in the past years, to understand how we got here, what worked and what gaps we need to address to ensure a sustainable tourism industry in Malta. To shed light on this matter, I will compare the state of our tourism industry in 2019 (the last year before the pandemic) with its condition in 2025.

If we were to compare the amount of inbound tourists for each month of the year for 2019 and 2025 we would get the below results:

The chart above begins to reveal some interesting insights. First of all, one can see that the greatest monthly increases were in the so-called shoulder months and not in the peak summer months. So much so, that while August has remained the number one month both in 2025 and 2019 for tourist arrivals, the number two month has shifted from July in 2019 to October in 2025.

Between 2019 and 2025, there have also been shifts in source markets, while the top five source markets in 2019 where the UK, Italy, Germany, France and Spain, in 2025 we can see that Poland has substituted Spain in the top five source markets.

As I have long argued, the true test of the sustainability of our tourism industry is not merely the number of tourist arrivals, but the real average spending per tourist. As shown below, the real average spending per tourist in 2025 (based on 2019 price levels) was slightly higher than in 2019.

It is interesting to see a comparison of the average real spend per tourist on a monthly basis for 2019 and 2025 as show below.

The message from the above figures is very clear. The months in 2025 that generated the increase in average spend per tourist when compared to 2019 where September, October and November. A closer look at the age distribution of inbound tourists between June to August 2025 and September to November 2025, shed some light on why we had an increase in average real spend in the months September, October and November.

As shown above, around one third of tourists arriving in Malta during the summer months are under 24 years old, while only about a quarter are aged between 45 and 64. The situation shifts in the months of September to November 2025, whereby 70% of tourists arriving are between 25 years and 64 years. This, I believe, gives a good indication why the average real spend increased in the months of September, October and November 2025. This could also be linked to a very strong performance of the MICE sector during these months. It is well known that a MICE visitor has a higher spend per tourist than the average leisure tourist.

One element that also changes is the average duration (in bed nights) of tourists staying in Malta. In 2019 the average stay was of 7.02 bed nights. In 2025, the average went down to 6.32 bed nights. We need to keep a watchful eye here, as a dropping average stay brings its challenges as to fill bed nights one would need more tourist arrivals, putting more strain on the nation’s infrastructure.

I conclude with the target set for the Malta Vision 2050. In its issued consultation document, the Malta Vision 2050 set a target of 4.5 million tourists by 2035. At this rate we stand a good chance of hitting this number by end 2026. One wonders what this would mean from a policy perspective. Are we going to take measures to ensure that we protect the sustainability of our tourism industry by not allowing us to go beyond the 4.5 million mark in tourist arrivals? The Malta Vision 2050 sets the target to hit an average spend per night by 2035 of €220-€230 (on 2025 levels). The average nominal spend per night in 2025 was of €153.48. That means an ambitious 43% increase in average spend per night.

Malta stands at a pivotal crossroads in the development of its tourism industry. We have officially conquered the numbers game, but as we accelerate toward the 4.5 million target projected for 2035, which will likely be smashed by the end of 2026, we must ask ourselves: at what cost? The data is clear. Our future does not lie in more feet on the ground, but in the value those visitors bring. While the shift toward high-spending demographics in the shoulder months shows promise, the “litmus test” of our success remains the real average spend per tourist. The drop from 7.02 to 6.32 bed nights means we are working harder to fill the same space, placing an ever-increasing strain on our national infrastructure. Moreover, to reach the Malta Vision 2050 goal of €220-€230 per night, we must trigger a massive 43% increase in spending from our current levels.

If we are to reach “the next level”, our strategy must now prioritise high-quality experiences to attract the type of tourists needed to achieve a higher real average spend. This means that we must pivot from chasing volume to providing quality. The question is no longer how many tourists we can fit on our islands, but how much value we can derive from those who truly appreciate what we have to offer.

The post Inbound tourism – The next level first appeared on The Malta Business Weekly.

The International Monetary Fund (IMF) recently concluded its 2025 Article IV consultation with Malta, highlighting the microstate’s “robust momentum” with growth averaging nearly 7% over the last decade. This economic surge has been primarily led by tourism, online gaming, and professional services, heavily supported by significant inflows of foreign workers. However, the IMF warned that Malta’s labour-intensive growth model is approaching its limits. As the most densely-populated country in the EU, Malta faces mounting pressure on its infrastructure and public services. The IMF emphasised that future growth must shift toward productivity, specifically addressing persistent labour shortages and skills mismatches.

This point of the persistent labour shortages reminded me of the recent “firestorm” following comments by Gozo Bishop Anton Teuma. In a recent homily, the Bishop expressed concerns regarding the use of childcare centres for very young children, suggesting that parents who utilise them may be prioritising work over the personal care of their infants. This stance triggered an immediate debate among policymakers, who argue that childcare is an essential economic tool. Without it, the labour market would face even more severe shortages, as many families rely on dual incomes to navigate the rising costs of living and housing.

Incidentally, recently, a comprehensive working paper released by the Central Bank of Malta (CBM) provides the evidence needed to navigate this debate. The study, the first causal evaluation of the 2014 reform, reveals that the Free Childcare Scheme (FCS) has significantly boosted female employment probability.

The key findings from this CBM report include that the reform increased the probability of female employment by approximately 1.3 to 2.4 percentage points, with effects growing over time and peaking in 2016 and that such employment gains were disproportionately concentrated among single mothers and mothers with multiple children, subgroups that historically faced the greatest structural barriers to work. The CBM report also concluded that the FCS reform likely reduced Social Assistance for Single Unmarried Parents (SUP) claims by 1.2 percentage points and that the aggregate effect was mainly driven by new entrants into employment rather than the retention of those already working. The report also concluded that the FCS reform helped reduce pre-existing employment gaps by up to 26% for single mothers and 39.3% for mothers of two.

Derived from these CBM findings, several strategic inferences emerge regarding the future of the labour market. Since the FCS is highly effective at bringing mothers into the workforce, further mandates for extreme work flexibility should remain at the employer’s discretion. Moreover, the FCS should be strengthened because as outlined in the same CBM report, positive employment effects do not persist once a child turns three and eligibility ends and hence there is a clear need for state-funded “bridge” support, such as expanded Breakfast Clubs, to protect staff retention and investment in staff training done by private businesses. Moreover, to assist employers in a tight market, policy should pivot toward retention-based incentives, such as tax credits for employers that manage to offer the needed flexibility for parents who remain in full-time work throughout the early years of their children. Finally, in industries like manufacturing where remote work is impossible, robust and flexible childcare, with hours mirroring working shifts, remains the primary barrier to maintaining a stable workforce.

From a fiscal perspective, the free childcare service is a logical investment for the state. According to recent media reports, the government has signed a landmark agreement for the next four years (2026-2029) valued at €276.7 million. This results in an average annual expenditure of approximately €69.18 million.

With roughly 13,000 children in Malta under the age of two, the average annual amount the government would pay to families if this spending was diverted as a direct cash grant would be approximately €5,321 per year (or roughly €443 per month). This amount is far too low to induce one of the parents to stop working and stay at home, especially given current wage levels and the cost of living.

The economic returns are even more striking. Since the introduction of the scheme, the female employment rate has surged from under 50% before 2013 to nearly 75% by 2026. The CBM report on FCS concluded that the scheme has contributed to add approximately 6,200 women to the workforce who would otherwise have been inactive. Assuming these women earn the national average salary, the income tax and social security contributions they generate contribute significantly to the economy, meaning that a substantial part of the government subsidy for the free childcare is recovered by the income tax and social security payments made by such women added to the labour force.

In addition to these fiscal and demographic shifts, other social realities are fundamentally reshaping Malta’s landscape. A significant trend is the increasing dominance of women in higher education; in the 2023-2024 academic year, females comprised 55.3% of all tertiary students in Malta. This educational shift is even more pronounced at specific levels, with women outnumbering men by 10.6 percentage points in tertiary education. Furthermore, for every 100 male graduates in 2024, there were 134 female graduates, showing that women are becoming the most qualified cohort in the national talent pool. This progress indicates that for the modern Maltese woman, participation in the labour force is no longer driven solely by the need for extra household income to combat the rising cost of living. Instead, work has become a vital vehicle for self-realisation, personal growth, and professional identity. As women increasingly invest in their own human capital, the labour market has evolved from a financial necessity into a space where they seek to apply their high-level skills and fulfil their individual potential.

In addition to the above, the role of quality childcare in the early socialisation of pre-school children cannot be overlooked. As Maltese families continue to have fewer children – a trend reflected in the declining fertility rates – the traditional environment of large nuclear and extended families is becoming less common. In this shifting social landscape, childcare centres have become the primary arena for early socialisation, providing children with the necessary opportunity to interact with same-age peers. This early exposure to a collective environment is essential for developing social wellbeing and emotional intelligence. By learning to navigate peer dynamics, share resources and follow structured routines outside the home, children build the foundational skills required for school readiness, ensuring a smoother transition into the formal education system.

The free childcare CBM analysis study also mentions that the added 6,200 women to the labour force likely generated some €180 million in additional wage income for their families. This point made me think on the recent talk on housing affordability.

Recent reports and statements from the CBM, including the 2025/2026 Quarterly Reviews and Financial Stability Reports, suggest a complex “dual reality”: while the CBM maintains that the property market is technically not in a crisis or significantly overvalued, it acknowledges that affordability is deteriorating for new entrants and low-income earners.

In late 2025, the CBM stated that property prices have actually been undervalued by approximately 5% over the last three-and-a-half years relative to economic fundamentals. They argue that prices are broadly aligned with the country’s strong GDP growth and disposable income. A point of recent contention (January 2026) involved the CBM clarifying that 91% of households in the 18-34 age group are homeowners. However, they noted this refers to households – it does not account for the significant number of young adults still living with parents who have not yet formed their own households. Despite the “no crisis” stance, the CBM admits that low-income earners (earning below €25,000) and single first-time buyers are being increasingly priced out of the average-priced unit.

While the CBM uses the Residential Property Price Index (RPPI) based on actual deeds, other local reports (like the KPMG/MDA study often cited in CBM dialogues) provide a starker view of the price-to-wage gap.

On average various data points indicate that between 2017 to 2025, property prices have increased by 59% and wages have increase by 25% to 30% (differences by economic sector). This has led to a worsening of the price to income ratio. According to the CBM historical data and research bulletins, the price-to-income ratio for a first-time buyer couple in 2017 was approximately 5.4, while for single individuals, it was roughly 9.9. By 2024/5 this price to income ratio has increased to 8.1 for a first-time buyer couple to 14 for a single first-time buyer. Furthermore, recent studies also note that over one-third of first-time buyers now require direct financial assistance from parents to enter the market, indicating that wages alone are no longer sufficient for many.

Taken together, these points present a compelling picture when the connections between them are considered. A central argument in recent economic assessments like the IMF is that Malta’s current labour-intensive growth model is reaching its limits, warning that wage growth cannot continue to outpace productivity growth indefinitely as this makes Malta’s economy less competitive on the global stage.

This means that future growth must come from productivity gains and automation, meaning firms will not be able to simply “hand out” high wage increases to cover rising living costs without a corresponding increase in output. CBM projections in the latest Business Dialogue for 2026 show wage growth slowing to approximately 3.7% (down from peaks of nearly 6-7% in 2024). This mandatory “wage cooling” creates a dangerous pincer movement for the average resident. While wages are expected to moderate to the 3%-4% range by 2026 to protect national competitiveness, property prices in many segments (specifically apartments) have continued to grow at 5%-7%. Property prices are unlikely to drop because construction costs remain high due to labour shortages If wages slow down but property prices do not, the Price-to-Income Ratio will naturally worsen.

The current debate surrounding Malta’s economic growth model and social infrastructure represents a defining crossroad for the nation. As the IMF has pointed out, the era of labour-intensive growth, driven by sheer numbers, is reaching its natural limits. Turning back the clock to a model of maternal inactivity is not only a regressive social step but a fiscal impossibility in an economy where dual incomes are now a prerequisite for housing affordability and basic economic survival. The “no-brainer” success of the Free Childcare Scheme, which activates thousands of our most educated citizens and generates tens of millions in annual tax revenue, proves that the way forward is to deepen participation, not retreat from it.

However, for this model to remain sustainable, Malta must pivot from volume to value. The primary solution to the “pincer movement” of cooling wages and rising property prices is a massive, nationwide investment in productivity through digital solutions and automation. By increasing the value of every hour worked, employees can command higher salaries that outpace the cost of living without eroding national competitiveness. This surge in productivity will, in turn, provide the state with the enhanced fiscal revenue needed to fund the next generation of social support: expanded “bridge” services, flexible work incentives, and robust infrastructure for working parents. The path forward is not to discourage parents from working, but to empower them through an economy that is smarter, more efficient, and relentlessly focused on productivity growth. Malta’s future lies in creating a high-value ecosystem that rewards self-realisation and provides every family with a genuine pathway to prosperity.

The post IMF, childcare and housing affordability first appeared on The Malta Business Weekly.

Malta’s economic performance continues to outpace the Euro Area (EA), with a projected Real GDP growth of 3.7% for 2026, compared to just 1.2% for the EA. At a 2.8% unemployment rate Malta maintains a significantly tighter labour market than the EA average of 6.2%. While this supports consumer spending, it presents a “talent war” for firms. Economic growth in Malta is currently undergoing a process of normalisation, as real GDP growth rates transition from the exceptionally high post-pandemic levels to a more stable, medium-term trajectory. The transition is characterised by a gradual moderation in growth, moving towards the economy’s potential output by the end of the current forecast horizon.

Real GDP reached a high of 6.8% in 2024 (following even higher rates in previous years, such as 10.6% in 2023). Economic growth is estimated to moderate to approximately 3.7%-4% by end 2025 and is forecast to remain stable around 3.7%-3.8% in 2026, eventually settling toward 3.5% in 2027 and 3.2% by 2028. Several domestic and international factors are contributing to the cooling of economic activity. After a period of robust spending, private consumption is easing toward a more typical growth rate. Projected growth for private consumption is set to moderate from recent highs to approximately 3.1%-3.5% by 2027. Growth momentum is also being weighed down by physical capacity bottlenecks and a structurally tight labour market. Acute skills’ mismatches and tighter immigration rules are expected to slow employment growth from 5.3% in 2024 to roughly 2.3%-2.9% over the coming years. Following a massive post-pandemic rebound, tourism is reaching a more mature growth phase.

Malta’s economic growth has been fuelled by two major factors. An increase in population density and an increase in the employment rate. This means that economic growth has historically relied more on increasing the quantity of labour and population rather than substantial leaps in productivity, with Malta’s productivity growth lagging behind the EU average. Now, as the economy reaches its physical capacity limits, this “quantity-driven” era is shifting toward a normalisation phase focused on more sustainable, potential output. To put things into perspective with regards the tight labour market, as outlined below, Malta’s population by end 2024 had more foreign nationals residing in Malta than Maltese nationals between the ages of 26 to 36.

On the other hand the latest economic update, issued by the Central Bank of Malta, outlines that overall consumer and business sentiment is on a high, but then the bank’s Economic Policy Uncertainty (EPU) Index has moved further above its historical average, driven largely by domestic concerns. This suggests that while businesses feel confident today, they are wary of the policy and environmental shifts required for tomorrow.

The data is unequivocal. The post-pandemic “sugar rush” has faded, leaving behind an economy that can no longer rely on the sheer volume of arrivals or the continuous expansion of the labour force to drive prosperity. Malta’s transition to a normalised growth rate of 3.2%-3.7% is not a sign of failure, but a mandatory evolution toward its potential output.

For the Maltese business community, this “new normal” represents a high-stakes race against structural constraints. With unemployment at a historic low of 2.8% and a labour market so tight that foreign nationals now outnumber locals in key productive age brackets, the traditional recruitment-led growth model has hit a wall. Productivity is no longer a buzzword; it is the only viable survival mechanism. Businesses that fail to pivot by investing in a digital transformation, will find themselves trapped between rising operating costs and a slower topline growth trajectory that leads to eroded competitiveness. Conversely, the winners will be those businesses who will treat digital transformation not as a software upgrade, but as a fundamental re-engineering of their value proposition and operational processes. In an economy at a critical juncture, the greatest risk is standing still.

The post The imperative of technology-based productivity growth first appeared on The Malta Business Weekly.