Deloitte’s 2026 Global Tax Policy Survey of 1,010 tax and finance leaders across 28 jurisdictions reveals that organisations are facing increased tax complexity, growing compliance burdens, and high upfront costs to reap the benefits of digitalisation. For Maltese businesses, these demands present an opportunity to assess and redesign their financial data and systems’ environment.

“Organisations are contending with a substantial increase in the demands placed on their finance functions,” says Conrad Cassar Torregiani, Deloitte Malta Tax leader. “The survey data shows that 84% of respondents expect more public tax disclosures and reporting in the next two to three years. For Maltese organisations, this compliance trigger should prompt a broader assessment: how can we use this as an opportunity to improve our data quality, implement AI tools, automate processes, and elevate our teams to higher-value work?”

Compliance as a catalyst for financial transformation

The survey identifies compliance and administrative requirements as the single biggest operational impact across all tax policy areas. Almost 40% of respondents cite the rising compliance burden as their primary concern and 84% of respondents anticipate increased public tax disclosures and reporting requirements over the next two to three years.

“The investment will need to be made, the approach will define whether the outcome is a cost or a benefit,” says Cassar Torregiani. “Leaders need to reframe compliance as a transformative opportunity, not as isolated projects, but as a catalyst to improve tax and finance data quality, to enable AI deployment, and identify automation opportunities. Organisations that take a more holistic approach will emerge with efficiencies and advantages that go beyond meeting reporting requirements.”

Eighty-eight per cent of respondents expect to pay more tax as a result of the Organisation for Economic Co-operation and Development’s (OECD) initiatives around ensuring the imposition of a global minimum tax for multinationals, suggesting that the initiative is achieving its intended policy objective. However, although there have been moves towards simplification, such as the introduction of new safe harbours, more is needed with 41% of respondents believing that further simplification of compliance should be a priority.

Mixed news on digitalisation

Most businesses expect to benefit from simpler, more efficient tax administration through digitalisation. Some, though, are experiencing challenges during the transition phase, citing increased costs and complexity – 85% of respondents expect AI-based tax compliance software to deliver positive impacts ranging from improved accuracy to reduced compliance costs, while 15% remain more negative, expecting the main impact to be increased implementation costs.

The key to realising these benefits is avoiding a narrow compliance-focused approach. Organisations that implement e-invoicing, data management systems, and AI tools as part of a coordinated financial transformation will see broader returns. These include improved data quality for strategic analysis, enhanced process automation across finance functions, and the ability to deploy AI tools for forecasting, risk analysis, and financial planning. Relieving finance function staff of repetitive manual work will also create an opportunity to elevate staff to higher-value strategic and analytical work.

E-invoicing presents a case study in this approach. Optimism about its simplification benefits has declined from 40% in 2025 to 36% in 2026, as concerns about implementation costs have increased. However, when integrated into a broader financial data transformation, where the improved data quality needed for e-invoicing data feeds into improved financial systems, analytics, and AI applications, the possible return on investment is elevated. The same holds true for Tax Administration 3.0, the OECD’s vision of seamless digital tax administration, which is expected to deliver positive outcomes by 80% of respondents. However, 19% expect increased costs and complexity during implementation.

Recognising these challenges, policymakers across the globe are pursuing simplification agendas. The European Commission is soon to release a tax omnibus package with the declared objective to streamline compliance and enhance competitiveness of the Single Market. The approach adopted in the omnibus will be closely watched, as it signals how policymakers in the EU intend to tackle concerns around the growing cost and complexity of tax compliance.

Tax incentives are key for the future

As global tax frameworks stabilise, tax incentives are emerging as a primary tool for jurisdictional competition. The survey shows that 57% of respondents note that governments are increasingly using tax incentives to attract foreign talent. The survey also shows that 38% of respondents expect new tax incentives to emerge as global minimum tax frameworks become established, while 57% expect existing incentives to remain valuable.

This trend is relevant for Malta, which has historically relied on tax incentives to provide genuine competitive advantage in attracting both investment and talent. In an environment where governments globally are increasing their use of incentives, Malta’s proposition must be continuously innovated to remain competitive in attracting and retaining high-value-add business activity.

“Tax incentives are increasingly shaping how jurisdictions compete for investment and talent,” says Cassar Torregiani. “Malta’s tax incentive framework can be a genuine competitive advantage. As governments globally increase their use of incentives to attract foreign talent and investment, Malta must continue to innovate to remain competitive.”

For more information visit www.deloitte.com/mt/gtps

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New findings presented at the Wellbeing at the Workplace national conference, jointly hosted by Malta Employers, misco and Atlas Insurance, highlight a labour market where wellbeing efforts are continuous and are increasingly shaped by how work is organised, with flexible working emerging as a key response that may support better mental and physical wellbeing, reduce burnout, improve work-life balance and give employees greater control over their schedules.

The research, presented by Lawrence Zammit, founding partner and director at misco, shows that 68% of employees rate their overall wellbeing as positive. However, this positive self-assessment sits alongside continued strain, with 83% reporting they have experienced work-related health or wellbeing difficulties at some point in their careers.

Among the main pressures identified were long working hours which are often necessitated by operational pressures due to lack of staff – 45% of interviewed employees claimed to work more than 40 hours per week and 13% said they exceeded 48 hours. Those working longer hours were more likely to report wellbeing difficulties, underlining the link between time pressure and sustained stress.

Against this backdrop, discussion at the conference focused on a shift in emphasis: from standalone wellbeing initiatives towards the structure and design of work itself. Flexibility, autonomy and hybrid working models are increasingly seen as central to addressing both employee expectations and organisational performance.

Kevin J Borg, director general of Malta Employers, said that: “Flexible work needs to be considered in the context of better mental and physical wellbeing. It can contribute to lower burnout, greater control over schedules, improved work-life balance, higher job satisfaction and lower stress,” he said.

He added that the benefits are also organisational. “Employers can also gain through reduced absenteeism, stronger employee engagement, greater loyalty and increased productivity, because employees are better able to manage personal and professional responsibilities effectively.”

Evidence suggests that many employers are already adapting where the nature of work permits. Additionally, the Malta Employers’ Association survey gathered recommendations from businesses and policymakers on regulating flexibility, drawing on their practical experience. The advice closely mirrors the stand of the association in favour of avoiding regulation and allowing the employer and employee to negotiate directly in accordance with their needs and realities. Companies also called for focus on improved support infrastructure for parents and carers rather than mandating arrangements.

Jackie Attard Montalto, chief HR officer at Atlas highlighted the importance of ensuring HR approaches are grounded in operational reality, with greater involvement of managers in shaping and testing workplace initiatives. She stressed the need for stronger feedback loops so organisations can better understand what is working in practice and adjust accordingly.

Malta Employers president Ivan Refalo added that leadership and communication are central to making flexible models effective, particularly in organisations operating under resource constraints. He emphasised shared responsibility and the need for clarity in expectations, noting that two-way communication is essential for building trust and ensuring flexibility works in practice, supported by appropriate training and guidance.

The event themed, Wellbeing at the workplace – Turning research into practical action, focused on physical and mental health and featured talks covering all aspects of wellbeing at the place of work including flexible and hybrid work practices; managing workload boundaries and burnout; leadership behaviour and workplace culture; mental health support; healthy lifestyles and nutrition, financial wellbeing and awareness; and supporting diverse workforce needs. The event featured a number of panel and roundtable discussions during which a number of industry leaders, both local and foreign, shared their views and insights, highlighting how the consideration of wellbeing is no longer a peripheral workplace feature but should form an integral part of employers’ practical workforce strategy.

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As from May, the European Commission suspended business survey results for Malta (and Estonia), due to changes in partner institutes. Consequently, the Economic Sentiment Indicator, the Employment Expectations Indicator and the Economic Uncertainty Indicator are not available. However, the consumer sentiment indicator remains available, and it improved significantly in May.

Overall, conditions in the property market remain strong. In May, approved commercial permits increased compared with a year earlier. On the demand side, both the number of residential promise-of-sale agreements and the number of final deeds of sale decreased in May, compared with a year earlier.

In May, unemployment expectations, as published by the European Commission, rose to stand above their historical average. The unemployment rate increased slightly to 3.6% in April, and stood above the previous month’s rate and the rate recorded in the same month a year earlier.

Malta’s inflation rate declined in May and stood well below that in the euro area. The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) declined to 2.1% in May, while HICP inflation excluding food and energy fell marginally to 2.3%. Across the euro area, HICP inflation was higher than that in Malta due to the increase in energy inflation in the euro area. In May, inflation based on the Retail Price Index (RPI) decreased.

In April, the Consolidated Fund reported a surplus compared with a deficit recorded a year earlier, due to an increase in government revenue which outweighed an increase in government expenditure.

The annual rate of change of Maltese residents’ deposits decelerated when compared with March, while annual credit growth was unchanged.

The full ‘Economic Update’ is available on www.centralbankmalta.org/economic-update

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The Gozo Tourism Operators Performance Review 2025, based on a survey of 80 tourism-related businesses conducted in April this year, paints a largely positive picture of the island’s tourism industry. However, it also highlights persistent challenges linked to operating costs, labour shortages and infrastructure.

The report found that 56% of respondents experienced an improvement in business performance during 2025 when compared to the previous year. A further 30% reported no significant change, while only 14% said their performance had deteriorated.

Among the six tourism categories surveyed, tourist attractions and activities emerged as the strongest-performing segment, with 76% of operators reporting better results than in 2024. Tourism and travel services followed closely, with 75% registering improved performance.

On the other hand, food and beverage establishments recorded the highest proportion of businesses reporting a decline in performance, at 22%. Transport and mobility services followed with 20%, while collective accommodation establishments such as hotels, boutique hotels and guesthouses recorded an 18% decline.

The report underlines the importance of international visitors to Gozo’s tourism economy. More than three-quarters of respondents, 77%, said foreign markets had a positive impact on their business performance during 2025. Of these, 45% described the impact as “good”, while another 32% considered it “excellent”.

Tourist attractions and activity providers, including diving centres and cultural attractions, were particularly upbeat about international demand, recording the highest share of “excellent” ratings.

The strength of foreign demand was also evident when operators compared 2025 with the previous year. Most respondents reported that the contribution of foreign markets had improved, while only 13% believed the impact had worsened. The report notes that negative shifts in foreign demand were relatively limited.

Non-collective accommodation providers, including self-catering apartments, villas and farmhouses, reported the most stable situation, with more than half indicating that the contribution of foreign markets remained unchanged from 2024.

Domestic tourism also played an important role, although its contribution was noticeably weaker than that of international visitors.

The survey found that 45% of respondents described the impact of the domestic market as “good”, while 44% rated it as “average”. Just 11% considered local demand to have had an “excellent” impact on their business.

Interestingly, those who awarded the domestic market an “excellent” rating were concentrated mainly within the food and beverage sector, suggesting that local visitors continue to play an important role for restaurants and bars.

When compared with 2024, most operators said the contribution of domestic demand remained stable. Some 68% reported no change, while 23% said the impact of local demand had increased. Only one in ten respondents reported a decline.

The positive performance trends translated into stronger revenues for many businesses.

Three-quarters of survey participants rated their revenue generation during 2025 as either “good” or “excellent”. Specifically, 65% selected “good” and a further 10% selected “excellent”, while the remaining quarter described revenue generation as average.

The transport and mobility services sector stood out as the weakest performer in this regard, with 60% of respondents in that category reporting only average revenue generation.

Overall, revenues improved compared to 2024, with only 15% reporting a decline. Nearly one-third said revenues remained unchanged.

The report attributes part of this improvement to stronger performance during the festive season at the end of 2025.

Perhaps more significantly, the findings suggest that revenue growth was driven by increased demand rather than higher prices. Among businesses that reported higher revenues, 71% said the improvement resulted primarily from an increase in clientele rather than price adjustments.

This indicates that growth was largely demand-led, reflecting stronger visitor numbers rather than inflation-driven revenue gains, the report said.

The survey also examined how businesses perceived the development of their operations over the course of the year.

Most operators reported that their businesses had improved during 2025. Tourism and travel services led the way, with 75% reporting operational improvements. Collective accommodation and tourist attractions and activities both recorded improvement rates of 65%.

Only 8% of respondents reported deterioration in business operations, with transport and mobility services again emerging as the most challenged sector.

Despite the generally positive performance, tourism operators identified several significant obstacles affecting their businesses.

Rising operating costs were by far the most frequently cited challenge, mentioned by around 71% of respondents. The report links this concern to wider inflationary pressures and volatility in international energy and transport markets.

Labour shortages remain another major concern. More than half of respondents identified staff shortages as a key issue, while a similar proportion pointed to difficulties associated with foreign work permits.

These labour-related challenges were particularly acute in the food and beverage sector and among transport and mobility operators.

Infrastructure concerns also featured prominently, with 40% of respondents identifying them as a challenge. Within the transport and mobility category, the figure rose to 60%, highlighting the sector’s dependence on road networks and connectivity.

Additional concerns raised by operators included increasing competition in the non-collective accommodation market and the growing prevalence of day-trippers, which may limit spending on accommodation and other tourism services.

The report concluded that Gozo’s tourism sector maintained a positive trajectory throughout 2025, supported by strong international demand and improved revenue performance. However, it also warns that structural challenges linked to costs, labour availability and infrastructure continue to affect businesses and could influence future growth if left unaddressed.

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Artificial Intelligence has rapidly become a standing agenda item in boardrooms across the world. Yet while many discussions focus on the technology itself, the more important questions are around leadership, governance and judgement.

The same is true of cyber security. Most directors recognise the threat posed by cyber-attacks, but many continue to view cyber risk as an IT matter rather than a business issue. In reality, both AI and cyber security have become matters of strategic importance that require active board oversight.

Recently, I’ve observed a growing divide between organisations that see technology as a source of competitive advantage and those that view it primarily as a source of risk. The most successful organisations understand that it is both.

For boards, the challenge is not becoming experts in artificial intelligence or cyber security. The challenge is ensuring that the right questions are being asked and that management is approaching both opportunity and risk in a disciplined way. Artificial intelligence offers significant opportunities for businesses of all sizes. It can improve productivity, enhance customer experience, support decision-making and create entirely new products and services.

In Malta, board oversight of technology is bound to become increasingly important. Many of its successful businesses have grown from entrepreneurial, founder-led organisations into more sophisticated enterprises operating across multiple jurisdictions. As organisations scale, the risks associated with cyber resilience, data governance and the use of artificial intelligence will become more significant. The challenge for these companies will be to support innovation and growth while ensuring that governance frameworks evolve at the same pace. This is not about slowing change; it is about ensuring that change is sustainable, responsible and aligned with the organisation’s long-term objectives.

The enthusiasm surrounding AI can sometimes however obscure important governance questions. How reliable is the information being generated? What controls are in place? How are customer data and privacy being protected? Are employees receiving appropriate training? What reputational, regulatory and financial risks might arise if systems fail or produce inaccurate outputs? These are not technology questions. They are board level questions.

Similarly, cyber security is no longer simply about protecting systems. It is about protecting customers, employees, reputation and ultimately shareholder value. When organisations experience significant cyber incidents, the consequences extend well beyond operational disruption. Customer trust can be damaged, regulatory scrutiny can increase, and recovery costs can be substantial. In some cases, the reputational impact can last for years.

Boards therefore need confidence that cyber resilience is being treated as a strategic priority. This does not mean reviewing technical specifications or software architecture. It means understanding the organisation’s most critical vulnerabilities, ensuring adequate investment and testing whether management is prepared to respond effectively if an incident occurs.

One of the most common mistakes I’ve observed is that technology discussions are often delegated to IT specialists. Expertise matters, but boards must avoid creating a situation where only a handful of individuals understand the risks and opportunities being discussed.

The role of the board is not to provide technical solutions. It is to exercise oversight, challenge assumptions and ensure that technology decisions align with the organisation’s strategy, values and risk appetite. This is particularly important for chief executives. Many first-time CEOs are leading organisations through a period of technological change unlike anything previous generations have experienced. They are expected to make decisions about AI, cyber resilience, data governance and digital transformation while simultaneously managing growth, culture, regulation, sustainability and stakeholder expectations.

The best CEOs do not pretend to have all the answers. Instead, they build diverse leadership teams, seek external perspectives and create an environment where difficult questions can be raised openly.

The question therefore is no longer whether artificial intelligence and cyber security should feature on the board agenda. They already do. The real question is whether boards are equipped to govern them effectively. Technology will continue to evolve, often faster than regulation and sometimes faster than organisations themselves. In that environment, competitive advantage will not come from having the newest technology. It will come from having the judgement, leadership and governance to use it wisely. Ultimately, AI and cyber security are not technology issues at all. They are tests of a board’s effectiveness.

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Buoyed by a summer schedule featuring more than 110 destinations, including three new routes inaugurated last month, this momentum continued into May as Malta International Airport welcomed 1.08 million passengers, MIA said. 

Additional flights contributed to an increase of 18.6 per cent in seat capacity. Despite this double-digit growth, a robust seat load factor (SLF) of 83.5 per cent was recorded, showing a strong appetite for travel to the Maltese Islands. This reflects a wider trend identified by the European Travel Commission, which found that southern European and Mediterranean destinations were Europeans’ preferred choice for summer travel this year. The most popular markets remained largely unchanged from previous months, with the United Kingdom topping the leader board with a market share of 21.3 per cent. Italy, Poland, Germany, and France rounded out the top five markets, recording growth rates that ranged between 8.0 per cent and 62.5 per cent.

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Against an uncertain global backdrop due to the Middle East conflict, the Maltese economy is expected to present some degree of resilience to these effects in 2026, though a marginal delayed impact on GDP and prices is envisaged to materialise in 2027.

Growth over the projection horizon is expected to be led by private consumption, which is projected to continue to grow at a brisk pace, in part supported by recent changes to income tax bands.

Employment growth is expected to moderate gradually to 2.3% by 2028. The unemployment rate is forecast to edge down to 2.9% over the projection horizon.

Wage growth is set to remain strong, driven by labour market tightness, but is set to ease to 3.9% in 2028 from 4.2% last year.

HICP inflation is projected to be impacted by the war in the Middle East, primarily through the channel of higher imported inflation, particularly in goods and food components as continued fiscal support mitigates the propagation of the energy shock on domestic energy prices. Overall HICP inflation is thus projected to increase to 2.5% in 2026 and is set to remain at that level in 2027. It is then expected to ease to 2.2% in 2028, driven primarily by lower services and NEIG inflation. Compared to the Bank’s previous forecast publication, overall HICP inflation has been revised up by 0.2 percentage points in 2026 and 2028 and by 0.4 percentage points in 2027.

The general government deficit-to-GDP ratio is projected to continue to decline over the forecast horizon, albeit in a more gradual manner. It is set to narrow to 1.9% in 2026, 1.7% in 2027 and to 1.6% by 2028. The general government debt-to-GDP ratio is expected to decline further from 46.4% in 2025 to 46.0% in 2026 and subsequently to 44.1% by 2028. 

Risks to growth are tilted to the downside. These risks largely emanate from the uncertainty surrounding the duration and intensity of the conflict in the Middle East which may lead to a weaker external environment and hence a more subdued trajectory in foreign demand. Disruptions to transport through the Strait of Hormuz have also raised concerns on fuel shortages in trading partner countries which may negatively impact tourism, aviation and the shipping industry. However, this downside risk to tourism could be mitigated potentially by the redirection of tourists towards safer destinations like central and western Mediterranean.

Risks to inflation are tilted to the upside over the projection horizon. Upside risks to inflation primarily reflect stronger disruptions to energy markets than assumed in the technical assumptions. Although the direct impact on domestic energy prices continues to be mitigated by the Government’s commitment to its fixed energy price policy, higher than envisaged global energy prices could generate stronger imported inflation, with potential further amplification via indirect effects on wages and profit margins. Inflation could also be higher than expected if supply disruptions were to spread to non-energy markets, although alternative supplies from other regions could mitigate this effect.

On the fiscal side, risks are assessed to be tilted to the downside (deficit-increasing). These predominantly stem from the possibility of slippages in current expenditure, notably higher-than-expected spending on energy support measures should commodity prices exceed assumptions. These risks are partly mitigated by the likelihood of higher-than-forecast increases in tax revenue, brought about by additional improvements in tax administration.

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Following the identification of hundreds of subsea targets along the 99-kilometre submarine corridor, specialised offshore teams relocated 117 unexploded ordnance items, predominantly dating back to the Second World War. This complex operation prepares the strategic maritime route for the next phase of installation, ensuring the protection of personnel, the integrity of the infrastructure, and the long-term reliability of the network.

The Identification and Clearance campaign was initiated following the completion of the Detailed Marine Route Survey, during which 707 magnetic targets were initially detected along the 99-kilometre submarine cable route between Malta and Sicily.

Following rigorous desktop post-survey analysis, this figure was reduced to 393 targets requiring direct physical investigation through specialised offshore inspection and clearance activities.

During the offshore campaign, 84 of these targets were initially confirmed to be unexploded ordnance (UXO). Whilst this already represented a significant volume compared to standard offshore surveys, further engineering challenges arose as works progressed. Additional UXOs were identified buried directly beneath some of the previously detected objects, raising the final number of cleared unexploded items within the corridor to 117.

The uncovered munitions varied considerably in type, size, and physical condition, ranging from artillery shells and hand grenades to Hedgehog anti-submarine mortars. Due to the depths involved and the inherent safety risks associated with unexploded wartime ordnance, handling and clearance activities were carried out by specialised personnel utilising remotely operated vehicles and dedicated offshore equipment. These operations required detailed planning, continuous coordination with the Armed Forces of Malta, and strict adherence to established safety protocols.

The campaign was executed through Interconnect Malta’s main contractor, Nexans, with the direct support of specialised subcontractors NextGeo and Sub Service S.r.l., who provided the necessary vessels, equipment, marine expertise, and Explosive Ordinance Disposal specialists. Following the successful completion of the operation, Sub Service S.r.l. will issue the relevant safety certifications.

Miriam Dalli, Minister for Energy, the Environment and the Regeneration of the Grand Harbour, stated that, “the successful completion of the identification and clearance campaign represents a major technical milestone for the Second Interconnector, a project which is central to Malta’s vision to decarbonise the sector by 2050.”

Inġ. Ismail D’Amato, Chief Executive Officer at Interconnect Malta, acknowledged the critical external support provided throughout the operation. “The collaboration, technical assistance, and close coordination with the Armed Forces of Malta at each stage of the campaign, were essential to ensuring that the works were carried out safely and in line with the required procedures,” he said.

The project consists of a new 122km long 245kV, 225MW, 50Hz electrical cable interconnection between Malta (Maghtab) and Sicily (Ragusa) to be laid in parallel but at a safe distance to the existing HVAC cable link which was commissioned in 2015.

This €300 million project was approved for ERDF funding, specifically under Priority 2, ‘Promoting clean and fair energy transition, sustainable wastewater management, and green investment’, and Specific Objective 2.3, ‘Developing smart energy systems, grids, and storage outside the TEN-E network’.

The second interconnector will not only increase the security of the electrical supply but will also lead to increased investment in renewable energy, which will help Malta better handle the intermittent nature of green sources like offshore wind and solar. Once completed, the 245kV submarine cable will double Malta’s connectivity to the European energy grid. According to the project’s cost-benefit analysis, 13.5 million tonnes of CO2 emissions will be reduced, enhancing its significance in Malta’s long-term decarbonisation strategy.

This €300 million investment has been approved for ERDF funding under the priority “Promoting a clean and just energy transition” and contributes directly to smart and stable energy systems. The project has been recognised as an “Operation of Strategic Importance” in the 2021-2027 Programme, with €261 million allocated in European funding.

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Unlike traditional financing arrangements that may require substantial upfront payments, GO ENERGI is offering customers solar energy systems with no upfront investment and repay the cost through monthly instalments at 0% interest. This offer is open to everyone, even to non-customers of GO.

Established by GO in 2024, GO ENERGI combines solar installation expertise with flexible financing options intended to reduce the initial financial commitment often associated with renewable energy projects.

“Malta has made significant progress in solar energy adoption over recent years, but there remains considerable potential for more households to benefit from renewable energy solutions. With Government grants currently available for both solar PV and battery storage systems, many homeowners have a valuable opportunity to invest in technologies that can help reduce energy costs while contributing to Malta’s sustainability goals,” said Alison Mercieca, Chief Commercial Officer at GO plc.

Government grants are available to residential properties holding a residential ARMS bill, with eligible households able to apply for both photovoltaic and battery storage grants. Homeowners who previously benefited from a solar panel grant more than six years ago may also qualify for battery storage support.

For households that do not qualify under the current grant scheme, GO ENERGI also offers solutions through the Feed-in Scheme, providing alternative pathways to renewable energy adoption.

To further encourage uptake, GO ENERGI has extended its customer incentive programme, offering a €25 KLIKK voucher following a site visit and a further €200 KLIKK or GO voucher upon installation.

Malta’s transition towards renewable energy continues to gather momentum, with almost 35,000 photovoltaic (PV) systems now installed across the country, according to the latest figures published by the National Statistics Office (NSO).

NSO data released last year reported that 34,955 grid-connected PV installations were operational by the end of 2024, with the domestic sector accounting for more than 93% of all systems and that renewable electricity generated from PV installations reached 326.5 GWh during the year, reflecting continued growth in residential solar energy adoption.

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The scope of the GBS is to gain deeper insights into sectoral developments and emerging trends, through semi-annual surveys. This business dialogue effort aims to foster regular communication with businesses operating in Gozo, gathering timely data on recent performance, business activity expectations, investment and employment trends, and pricing dynamics. By doing so, the GBS complements official economic indicators, which are often available only with a time lag.

Additionally, businesses are encouraged to share perspectives on sector-specific developments and current economic issues, providing qualitative feedback that allows both the authority and the chamber to understand the underlying drivers of present and future economic trends.

The sampling methodology remains the same over each period, together with the sampling stratification which reflects the economic composition of the Gozitan economy.

The key findings of the survey are outlined below.

Business conditions and expectations

Gozitan enterprises continued to record stable business conditions, with 58% of the participants stating that their situation remained unchanged in the preceding six months.

Businesses reporting worsening conditions were also lower than those recorded a year earlier, standing at 9% from 16%.

The net balance points to an improvement in sentiment, standing at 25%, which remains well above the 11% average recorded across all survey rounds, but five percentage points less than the all-time high of 30%, which was recorded in the previous survey round.

The secondary sector, consisting of manufacturing and construction enterprises, registered the largest share of improved business conditions, with a net balance of 38%.

The services sector also recorded a strong positive net balance, standing at 24%. Within this sector, accommodation and food service activities emerged as the category with the strongest positive sentiment, followed by the information and communication activities.

For the first time since the September 2023 survey round, cost pressures have emerged as the most pressing challenge for local firms, surpassing concerns related to staff shortages.

In the latest survey, 49% of participants reported cost pressures, an increase of nine percentage points when compared to that reported in the previous survey round. This was particularly evident within the transport and storage activities, followed by accommodation and food service activities, and construction.

Nonetheless, this survey round must be put within the context that it is the first to capture the potential implications of higher international energy and transportation prices driven by the escalated conflict in the Middle East. Although energy prices in Malta remain subsidised, higher global energy costs still feed through as they impact the prices of imported inputs.

The lack of suitable employees to support operations remains a very pressing challenge, with 48% of respondents flagging it. However, this represents a slight drop when compared with the September 2025 survey.

A slowdown in sales was cited by only 14% of respondents, an all-time low, although broadly in line with other March surveys.

Despite the global conditions, 48% of participants anticipate an improvement while only 10% foresee a deterioration in conditions. The remaining respondents (43%) expect conditions to remain unchanged. This results in the highest net balance recorded across all survey rounds, standing at 38%.

The strongest net balance, that of 44% was recorded in the knowledge sector, primarily made up of arts, entertainment and recreation category.

Prices

Cost pressures are also reflected in businesses’ price expectations, with 76% of respondents anticipating higher input prices over the coming six months.

This marks an increase over both the September 2025 round and the previous year, with industry, excluding construction, and transportation and storage activities reporting the strongest expectations of rising costs.

Despite expectations of higher input costs, these pressures are not yet being fully reflected in selling prices. Most respondents, 68%, expect selling prices to remain unchanged over the coming six months, while 33% anticipate an increase, a share broadly in line with previous survey rounds.

Employment

The vast majority of the businesses (63%) consider increasing their workforce in the short-term, whereas 38% of the sample indicated that they are not seeking additional employees.

The positive employment intentions were evident across all economic sectors.

Among the skills required one could notice strong demand for technical and operational competences.

Investment

64% of firms expect to make an investment in the coming six months, slightly exceeding the result of the September 2025 survey, with enterprises in the transportation and storage sector showing the strongest investment outlook.

A focus on external financing

The supplementary focus of the March survey was on external financing, with particular attention given to businesses’ access to suitable bank lending facilities.

64% of the respondents do currently have an external source of financing. Among these, bank loans and credit facilities represent the most common form of funding, accounting for 57% of the sample. A smaller proportion of businesses make use of bank loans or credit facilities supported by government or development bank schemes, which account for 7% of the sample.

30% of the surveyed firms stated that they do not have an outstanding external financing.

When asked about the ease of accessing external financing, the largest share (38%) highlighted that they lack sufficient information to provide an assessment, with 36% highlighting that this was an easy process, followed by 26% who highlighted that this was a relatively difficult process.

Among those who did identify challenges, the most common concern was the administrative or documentation burden associated with the process. Other factors mentioned included lack of information or guidance, as well as the cost of financing.

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