Deputy Prime Minister and Tourism Minister Ian Borg on Thursday announced a series of tourism-related measures and proposals aimed at improving the quality of Malta’s tourism product and supporting investment across the hospitality and cruise sectors.

The measures were announced during a press conference in St Julian’s attended by Borg, Parliamentary Secretary Alison Zerafa Civelli and Labour candidate Cressida Galea.

Among the key announcements was an increase in the eco-contribution charged on tourist overnight stays.

Zerafa Civelli said the fee will rise from 50 cents to €1.50 per person, per night, as from 1 July, 2026. The move is a measure which had been announced for this year’s Budget.

She also announced that 50 cents collected from each contribution will be allocated directly to Local Councils, with funds distributed according to the impact of tourism activity on each locality.

Borg said that the tourism industry has reached a stage where operators are reporting strong results even during the traditional shoulder season, prompting the government to shift its focus towards improving quality standards within the sector.

As part of this approach, the government is proposing a new tax credit scheme for tourism accommodation providers investing in renovation projects, higher standards, and improved customer experiences.

The scheme is intended to encourage upgrades to existing tourist accommodation establishments.

Another proposal targets Malta’s restaurant industry, which Borg described as a highly diversified and high-quality sector that must remain competitive.

Government said it plans to establish a €30 million fund dedicated to investment in restaurants.

Independent restaurants will be eligible to apply for grants of up to €300,000 to improve their product offering, enhance customer experience, train employees, or renovate their premises.

Borg also outlined plans to continue investing in cruise liner infrastructure at the Grand Harbour as Malta seeks to expand its home-porting operations and attract more luxury cruise liners.

Borg said that Malta has become a strategic pillar in the Mediterranean cruise industry, with close to one million passengers using the country’s ports annually.

He said voyages beginning or ending in Malta generate greater economic value for the local economy compared to transit visits.

Addressing questions from journalists about whether the new measures amounted to an acknowledgment of over-tourism in Malta, Borg rejected the suggestion and defended the importance of the tourism industry to the country’s economy.

Borg said the government would not accept statements that “undermine business, undermine investment, and undermine a sector that is crucial to our country’s economy.”

He said the government remained conscious of tourism numbers and the need for sustainable growth, while noting that many countries aspire to attract similar visitor figures.

“It is important that we grow intelligently and grow with quality,” Borg said, describing this as the main challenge facing the sector moving forward.

The post Malta to triple tourist eco-contribution from July first appeared on The Malta Business Weekly.

Malta’s payments landscape is undergoing a steady transformation driven by digital innovation, evolving customer expectations, and developments at European level. The increasing availability of instant payments and other electronic solutions is reshaping how individuals and businesses transfer money, placing greater emphasis on speed, security and convenience.

Within this context, the Central Bank of Malta (‘Central Bank’) continues to promote a gradual transition towards more efficient and resilient payment methods, while ensuring that existing instruments remain fit for purpose. The updates to Directive No. 19 on the Use of Cheques and Bank Drafts (‘Directive’) should be seen against this backdrop, ensuring that cheque usage remains proportionate, transparent and aligned with a modern payments’ ecosystem.

As background, the Central Bank acting in its capacity as the authority responsible for safeguarding the stability and efficiency of Malta’s payments landscape, first issued Directive No. 19 in 2021. The Directive came into force on 1 January 2022 and was subsequently amended in 2024.

The Directive was introduced to address recurring risks and operational challenges associated with the issuance and negotiation of cheques and bank drafts, including misuse, inefficiencies in processing and delayed settlement. By setting out clear obligations for issuers and beneficiaries it supports improved governance in the use of such payment instrument while complementing Malta’s broader shift towards more secure and efficient digital payment channels.

In 2025, the Central Bank published an analysis on The Usage of Cheques in Malta, that revealed a sharp decline of 78% in cheque usage between 2019 and 2024. This trend reflects a widespread take-up of digital alternatives based on the implementation of European regulatory frameworks.

In light of these developments and based on the Eurosystem’s comprehensive payments strategy which embrace innovation and forward-looking approach in payments, the Central Bank felt the need to update Directive No. 19. The amendments to the Directive will come into force on 1 January 2027. These updates aim to refine existing procedures and align cheque usage with evolving operational and security requirements, ensuring consistency with current practices. The key changes are outlined below.

Minimum cheque amount raised from €20 to €50

Effective 1 January 2027, cheques may only be issued for amounts of €50 or above. This adjustment is designed to shift routine, low‑value transactions towards digital payment options, such as instant payments, which offer quicker processing and greater convenience.

Limiting this payment instrument to higher‑value payments helps manage resources more efficiently by reducing manual handling costs incurred by institutions and lowering the likelihood of processing errors. For beneficiaries, this shift also promotes the use of digital payment methods, which offer stronger security, faster processing and clearer transaction records. This measure preserves the usefulness of cheques and bank drafts for significant transactions while encouraging more modern, efficient payment behaviour for everyday needs.

Cheques valid for three months

The updated framework shortens the validity of cheques from six months to three months. This reduces the risk that a cheque remains outstanding for an extended period, where it may be misplaced, misused, or simply not presented in a timely manner. A shorter validity window also supports a more efficient movement of funds, as the clearing and settlement process begins more promptly once the cheque is presented for processing.

A shorter validity period for cheques lead to a smoother settlement cycle, giving beneficiaries faster access to funds and a clearer view of their account activity. At the same time, institutions benefit from streamlined operational workflows, simplified account reconciliation, and fewer outdated instruments requiring follow‑up. Collectively, these improvements applicable on 1 January 2027, contribute to a more predictable and reliable processing environment for all parties involved across the payments chain.

Furthermore, the validity of bank drafts will remain 6 months given that this particular payment instrument is mainly used for larger transactions such as property purchases. Bank drafts are considered as more secure when compared to cheques given that the Bank issuer locks the funds upon issuance and thus provides certainty that funds are available.

Mandatory deposit of cheques into a payment account

To enhance transparency and improve the traceability of payments end‑to‑end, the new amendments will require all cheques and bank drafts to be deposited directly into a payment account rather than having the option to encash over the counter, a requirement that comes into force on 1 January 2027. This ensures that each cheque transaction is fully recorded within the banking system. It also supports anti‑money‑laundering controls by ensuring that all fund movements are captured within the payments’ infrastructure.

For beneficiaries depositing cheques and bank drafts into an account it ensures a standardised clearing process, and clearer indications of when funds shall be available, facilitating cash‑flow management and reducing uncertainty. Institutions likewise benefit from reduced cash handling, lower operational and security risks, and improved audit trails, resulting in a more controlled and efficient processing environment.

This update also aligns with Malta’s broader policy objective of strengthening transparency in payment practices. Recent amendments to the Employment and Industrial Relations Act (Cap. 452) require wages payable to third‑country nationals to be settled exclusively by bank transfer or through an electronic transfer executed by a licensed financial institution. Both developments move in the same direction: enhancing transparency, reducing risks of abuse, and supporting stronger oversight across the payments landscape.

Funds credited instantly in the case of over‑the‑counter deposits

Under the new amendments, cheques deposited in person at a branch of the issuing bank should be credited instantly, allowing immediate access to the funds, including cash withdrawal from an ATM. This procedure will also apply from 1 January 2027. By contrast, cheques deposited via an ATM of the same bank will be credited no later than the end of the following business day. The same rules also apply to cheques issued by the Central Bank on behalf of the Government of Malta, including tax refunds and government bonus cheques.

For beneficiaries, such changes provide quicker access to money and clear timeframes that support cash‑flow planning and reconciliation. For institutions, it enables more efficient in‑house processing, reduces risk exposure, and limits cash handling steps.

Key Takeaways

Overall, the updated Directive reflects a balanced approach between preserving payment choice and encouraging the adoption of more efficient alternatives. While cheques and bank drafts will continue to serve specific use cases, particularly for higher-value transactions, their role in everyday payments is expected to diminish further over time in favour of faster and more secure electronic solutions.

Looking ahead, the Central Bank will continue to support initiatives that strengthen the efficiency, resilience and strategic autonomy of the payments’ ecosystem. This includes fostering the uptake of instant payments and promoting solutions that enhance transparency, reduce risk, and align Malta with broader European developments in retail payments. In this evolving landscape, the Directive forms part of a wider policy direction aimed at ensuring that payment services remain accessible, secure and future-ready.

Dr Stephanie Gatt is Deputy Head Legal Department at the Central Bank of Malta

Gianella Azzopardi is Principal Expert Payments Policy and Compliance Office at the Central Bank of Malta

The post Cheque payment instrument: Key updates to Central Bank of Malta Directive No. 19 first appeared on The Malta Business Weekly.

As the financial services landscape grows increasingly digital and complex, the need for informed decision-making by citizens has never been more vital. To lead this effort locally, Sarah Pulis has been appointed as Malta’s Financial Literacy Ambassador. In this capacity, she joins an elite network of experts across the continent supporting the EU’s Savings and Investments Union, a flagship initiative designed to make financial markets more accessible and transparent for everyday citizens.

Tasked with bridging the gap between high-level policy and the “man on the street,” Pulis aims to demystify the world of finance for the Maltese public. In the following interview, she discusses her vision for the role, the specific challenges facing local households, and the roadmap for building a more financially resilient nation.

As Malta’s Financial Literacy Ambassador, how will you go about your duties?

Financial literacy isn’t confined to policy documents or classrooms; it plays out in our everyday lives. It is used when someone receives their first salary, considers taking out a loan, decides whether to start investing, or tries to understand if an investment offer is genuine.

As Malta’s Financial Literacy Ambassador, my role is to make these moments less confusing. This means working with Malta’s many stakeholders, including government bodies, regulators, and social policy actors, while engaging directly with the public. Clear communication, trust, and consistency are key.

What are your main priorities?

My priorities come from what we see happening in everyday life in Malta.

One key priority is helping people move from saving to informed investing. Maltese households are disciplined savers, but many people hold back from investing because they simply do not feel confident enough. Building a basic understanding of risk, diversification, different types of financial products, and the benefits of long-term planning is essential.

Another key priority is keeping people safe in a fast-moving digital environment. Scams are more sophisticated than ever and they affect people across all ages and backgrounds. Awareness needs to be practical, timely, and continuous, given the speed at which scams evolve.

Reaching people at different stages of life is also important. Financial literacy is most effective when it meets people where they already are, whether through media, schools, workplaces, or community settings, rather than expecting them to seek out purely formal education environments.

What do you perceive to be the biggest challenges the man on the street faces vis-à-vis financial literacy? How can you help?

A common challenge is uncertainty. Financial products, terms, and conditions can appear complex, and many people fear making the wrong choice, which can lead to inaction.

My role is not to advise individuals or simplify decisions for them, but to help reduce barriers to engagement by promoting clear, neutral, and consistent information. Encouraging people to ask questions, take time to consider offers, and seek reliable sources can already make a meaningful difference.

There is also a tendency to rely on familiar options, sometimes without reassessing whether these remain suitable. Promoting a basic understanding of risk and limitations can support more balanced decision-making without prescribing specific outcomes.

Digitalisation adds another layer. While many people are comfortable using digital tools, they may not always fully appreciate the implications of what they agree to online. Helping people recognise warning signs and understand where to find trusted information is an important part of the broader effort.

In February, the MFSA, in collaboration with the European Commission’s Reform and Investment task force (SG REFORM), the Organisation for Economic Co-operation and Development (OECD), and the Ministry for Finance of Malta, presented findings of a survey on the financial literacy and investment behaviours of Maltese retail investors. Those results showed that Malta’s overall financial literacy levels are slightly above the OECD average, reflecting strong budgeting and saving habits. But they also revealed persistent gaps in investment knowledge and participation. How do you intend to tackle this?

The survey results from the EU-funded Technical Support Instrument project tell an important story. Malta performs well overall, particularly in budgeting and saving, but clear gaps remain in investment knowledge and participation. Addressing these gaps starts with getting the basics right, such as explaining how risk and return are linked and why diversification matters. There are also widespread misconceptions about certain financial products, such as bonds, guarantees, and perceived safety, which need to be tackled directly.

Addressing this does not mean encouraging greater risk-taking. It means supporting a better understanding of basic investment concepts, while also addressing common misconceptions around perceived safety. The objective is to help people understand their options more clearly so that any decisions they take are better informed and aligned with their individual circumstances.

In March, the EU’s Commissioner for Financial Services and the Savings and Investments Union, Maria Luís Albuquerque, convened the first virtual meeting of national financial literacy ambassadors. Can you tell us what was discussed and any plans of action agreed upon?

The first meeting of EU Financial Literacy Ambassadors made it clear that Malta’s experiences mirror those seen across Europe. Digital fraud, low investor confidence, and gaps between awareness and understanding are common themes.

There was strong agreement that financial literacy plays a central role in building trust in financial markets and supporting the EU’s broader goals under the Savings and Investments Union. Ambassadors were seen as important bridges between policy-level objectives and practical, everyday realities. Going forward, the focus will be on sharing practical experiences, aligning messages where possible, and learning from what works across Member States.

Why is financial literacy such a big focus of the European Commission?

Financial literacy is a major focus of the European Commission because it is essential to achieving the EU’s objective of a genuine Savings and Investments Union. When citizens understand how to save, invest, and manage risk, they are more likely to participate confidently in financial markets, allowing household savings to be channelled into productive investments that support growth and innovation across the EU. At the same time, stronger financial literacy helps protect consumers, promotes inclusion, and builds trust in the financial system, all of which are critical for a resilient and integrated European economy.

Looking ahead

While the road to financial literacy is a long-term journey, Pulis remains optimistic about the impact of these collective efforts.

“One of my biggest challenges is maintaining momentum,” Pulis notes. “Financial products and digital risks evolve quickly, and our communication must keep pace. However, financial literacy is a shared responsibility. While institutions provide the tools, the goal is to empower the individual. In the long run, even small, consistent improvements in understanding can make a meaningful difference to a family’s financial resilience.”

The post Empowering a financially resilient Malta first appeared on The Malta Business Weekly.

An offshoot of US healthcare giant Baxter International is set to invest €150 million in a new pharmaceutical manufacturing facility in Ħal Far, Prime Minister Robert Abela announced on Wednesday.

The project will be operated by Vantive, a specialised healthcare firm focusing on therapies for vital organs. The announcement was made on Wednesday during a joint news conference held by government officials and company representatives.

According to the plans, the facility will be constructed on a 16,000-square-kilometre site, with works expected to commence later in 2026. Construction is projected to be completed by 2027, while the plant is targeted to become fully operational by 2029.

Vantive’s operations at the new site will centre on advanced treatments for organ care, with a particular emphasis on kidney therapies and dialysis solutions.

Speaking at the event, Prime Minister Robert Abela highlighted the long-term vision underpinning the investment, pointing to its role in creating around 250 career opportunities for Maltese workers.

“These are the types of investments that create careers for our students,” Abela said. “An investor will not commit €150 million in a country that lacks a clear vision for the future.”

He referenced the government’s long-term strategy, Malta Vision 2050, as a key factor in attracting such projects.

“We have given a clear direction of where we want to be in 25 years,” he said.

Abela also emphasised the broader societal impact of the investment, noting that the facility’s output will directly contribute to healthcare outcomes.

“This sector is one of excellence, and the products manufactured will improve people’s quality of health,” he said, adding that such projects are “tangible investments that contribute to the betterment of our society.”

Meanwhile, Economy Minister Silvio Schembri highlighted the significance of securing a major investment of this scale, noting that Malta’s track record and credibility continue to attract international players.

“It is not easy to secure investments of this level in our country, but we have built the experience and credibility to do so,” Schembri said. “With every challenge comes an opportunity, and we have brought an international company, Vantive, to operate in Malta.”

He added that construction on the site is expected to begin in the coming weeks and be completed by 2027, while encouraging students to prepare for future opportunities linked to the project.

“When you finish your studies, you can benefit from the opportunities we are creating,” he said, describing Vantive as “the type of investment our country needs.”

Schembri stressed that economic growth must translate into real improvements in people’s lives.

“Economic numbers are important, but they mean nothing if they do not better the lives of people. We want the economy to work for the people,” he said.

The post €150 million MedTech firm Vantive facility planned for Ħal Far first appeared on The Malta Business Weekly.

During the period, the Group delivered a resilient core operating performance, supported by strong capital and liquidity positions. Solid business activity sustained core income, with net interest income benefiting from continued lending growth and disciplined treasury management, underpinned by a stable, high‑quality funding base. Net Fee and Commission Income remained stable, reflecting strong customer activity and reinforcing the Group’s income diversification strategy.

The bottom line profitability was shaped by specific, non‑recurring factors, including heightened geopolitical tensions that led to increased financial‑market volatility. While not impacting the Group’s core operating activities, customer behaviour or portfolio performance, this resulted in an unrealised valuation impact on the equity investment portfolio. Consequently, a net trading loss of €3.6 million was recorded when compared with a gain of €5.5 million in 2025. This was not material and did not affect the Group’s capital strength or liquidity position.

Profitability was also influenced by higher impairment charges, reflecting specific and identifiable credit developments rather than a deterioration in the broader credit environment. The Group recognised an impairment charge of €5.6 million during the period, primarily driven by the continued material growth in the commercial lending book and the increase in stage 1 assets. Notwithstanding these charges, asset‑quality indicators remained strong, supported by prudent underwriting standards and disciplined credit‑risk management.

Performance highlights

• Profit Before Tax amounted to €54 million, down from €67.1 million.
• Net Interest Income stood at €100.2 million, up from €92.5 million.
• Net Fee and Commission Income increased from €20 million to €20.2 million.
• Operating costs totalled €61.7 million, up from €52.8 million.
• Cost‑to‑income ratio increased to 51.8% from 44.7%.
• Return on Average Equity (pre-tax) decreased to 14.2% from 17.9%.
• Deposits increased by €351.9 million, surpassing the €14.1 billion mark.
• Total assets stood at €17 billion, up from €16.5 billion in December 2025.
• The credit portfolio reached €8.3 billion, up from €8 billion in December 2025.
• Net Asset Value per share stood at €2.4, up from €2.3 in December 2025.
• Capital ratios remained strong and above regulatory requirements.

The Group continues to monitor the evolving geopolitical environment and its potential impact on the Maltese economy and the financial system and maintains enhanced monitoring across key risk dimensions. The assessment remains that Malta entered the current period of heightened geopolitical uncertainty from a position of relative strength, supported by resilient economic growth, low unemployment, moderating inflation and sound public finances.

The Group’s risk management framework incorporates forward looking scenario analysis and early warning indicators to identify emerging stresses. To date, these have not signalled any material deterioration in customer behaviour or portfolio performance. This approach ensures that the Group remains well positioned to absorb potential shocks and continue supporting customers and the wider economy amid an increasingly uncertain global backdrop.

Commenting on the Group’s performance, Chairperson Dr Cordina stated, “The Group delivered a strong start to the year, reflecting resilience, a disciplined approach and solid fundamentals. This performance was achieved in a stable economic environment, alongside the expected normalisation of earnings, interest rate stability and a renewed period of geopolitical uncertainty.

From a market standpoint, the Share Buyback Programme continued to support trading activity in the Bank’s shares, while preparations are now underway for the issuance of a €300 million Senior Preferred Instrument, subject to regulatory approval. Supported by a strong capital base, resilient day‑to‑day performance and consistent execution of our strategy, the Bank’s share price rose to highs of €2.14 during the period.

Looking ahead, the Group remains well positioned to deliver a profit before tax for the year in the range of €210 million to €250 million, in line with previous guidance. We also remain committed to rewarding our shareholders and intend to maintain our policy of distributing up to 50% of after‑tax profits, subject to prevailing market conditions.”

CEO Kenneth Farrugia said, “I am pleased to report another strong performance by the BOV Group, building on the positive results delivered in 2025. During the first quarter of 2026, the Group sustained resilient operating performance, continued to grow its balance sheet and maintained sound asset quality, sustained lending and treasury activities, supported by a diversified business model.

The depth of our deposit base reflects the confidence our customers place in our credibility and long‑term approach. The growth and diversification of our corporate loan book support key commercial economic sectors, while the consolidation of our corporate services under one roof and the broadening of our service offer through non‑life insurance further strengthen our position as the Bank of Choice in Malta.

These results reflect strong fundamentals and continued customer trust. With the largest network of customer touchpoints in Malta, and a resilience underpinned by strong investment‑grade credit ratings, the Group is uniquely positioned to deliver stability and consistency while remaining deeply embedded in Malta’s economy. As we enter the final year of our strategic cycle, our focus remains on disciplined execution, responsible banking and the creation of long‑term value for all our stakeholders.”

Financial performance

Net Interest Income for Q1 amounted to €100.2 million, an increase of €7.7 million when compared to 2025. Growth was recorded in both loans and advances to customers underscoring the relevance of BOV’s products within the lending sector and equally important income from disciplined treasury management. Net Fee and Commission Income is reported at €20.2 million, a marginal increase of 1.1% from the same quarter last year, reflecting resilient customer activity with continued strength in cards and credit-related fees, consistent with ongoing shifts towards digital payment solutions.

Operating costs at end March 2026 totalled €61.7 million, an increase of €8.9 million over Q1 2025. This reflects higher personnel and IT costs, depreciation charges and contributions to the Depositor Compensation Scheme. As a result, the cost‑to‑income ratio increased from 44.7% in 2025 to 51.8%, consistent with the expected low‑to‑mid‑50% range outlined in the forward guidance.

The return on average equity (pre-tax) declined to 14.2%, down by 3.7 percentage points compared to 2025, consistent with the expected range communicated earlier this year and very much influenced by the one off profitability movements and the increased equity base. Earnings Per Share decreased to €0.056 compared to €0.069 for 2025 (restated for bonus issue in Q2 2025), reflecting the lower profit before tax for the quarter and the ongoing share buyback programme that partially mitigated the decline.

Asset quality indicators remain strong, with the NPL ratio improving to 1.57%, while ECL coverage ratio for credit-impaired assets stood at 55.1%, reflecting a sensible provisioning stance while continuing to benefit from improving portfolio quality and dynamics.

Financial position

Total assets stood at €17 billion in March 2026, up by approximately half a billion when compared with 2025. This represents a new high for the Group, with growth reflecting sustained balance-sheet expansion, consistent with the strategic focus on supporting domestic economic activity while maintaining strong liquidity and funding discipline. The Treasury portfolio has now reached €7 billion in Q1 2026, an increase of €119.3 million, reflecting the Group’s deployment of excess liquidity into high-quality debt securities.

The credit portfolio continued to grow, with the balance reaching €8.3 billion in the first quarter, reflecting strong momentum in customer lending. As a result, the gross loan-to-deposits ratio increased from 59% in December 2025 to 59.5% during the quarter. Deposits experienced another significant increase of €351.9 million or 2.6% during the first quarter of 2026, surpassing the €14.1 billion mark, reflecting the strength of the Group’s retail franchise driven by an increase in both retail and business deposits. As a result, the Group maintained very strong liquidity position, with the LCR ratio of 385.8% well above the minimum regulatory requirements.

The Group’s total equity closed at €1.5 billion, marginally higher from December 2025 with the Net Asset Value per share standing at €2.4 per share (December 2025: €2.3 per share), further strengthening the underlying book value position. The Group’s capital ratios remained strong and comfortably above regulatory requirements.

The post BOV reports profit before tax of €54 million for first quarter 2026 first appeared on The Malta Business Weekly.

The research, authored by Professor Rose Marie Azzopardi and Professor Alexiei Dingli, brings together extensive local and international analysis, stakeholder engagement, and forward-looking insights, positioning human capital as a central pillar for Malta’s future competitiveness.

Speaking at the launch, the Chair of The Malta Chamber’s Employment Agencies Business Section Mr Justin Anastasi described the report as a turning point in Malta’s economic journey.

“Over the past decade, Malta has experienced strong economic growth driven largely by expansion in numbers. However, the time has now come to shift decisively towards quality,” he said.

“This report clearly shows that we are facing structural challenges, including skills mismatches, skills shortages, and an increasing reliance on foreign labour. At the same time, education outcomes are not fully aligned with labour market needs.”

“If Malta is to remain competitive, we must prioritise productivity, invest in upskilling and reskilling, and strengthen the link between education and industry. Lifelong learning is no longer optional, it is essential.”

Also addressing the launch, Mr Geoffrey Fichte, CEO of HSBC Malta, emphasised the broader national importance of the project.

“Malta’s economy stands out as a real success story in Europe.  This has been achieved thanks to the innovation and hard work of its people, supported by clear government policy and a forward-looking strategy,” he said.

“We supported this research project to better understand what is needed for continued success in the economy of the future including technological change, artificial intelligence and global competition.”

“It provides some clear and actionable recommendations to build a more skilled, adaptable, and future-ready workforce.”

The report highlights a number of critical challenges and priorities for Malta’s development. It finds that while economic growth has been strong, it has been largely driven by workforce expansion rather than productivity gains, making a transition towards a quality-driven economic model essential.

Among its key findings, the report identifies persistent skills mismatches, shortages in key sectors, and a continued brain drain of highly educated individuals. It also points to a growing disconnect between education investment and outcomes, as well as the need to better align education systems with labour market demands.

In response, the report calls for a fundamental shift towards lifelong learning, stronger collaboration between education and industry, and the adoption of more flexible and modern learning approaches, including micro-credentials and competency-based education. It also emphasises the importance of digital skills, adaptability, and continuous upskilling in a rapidly changing global economy.

Both organisations reiterated that addressing these challenges requires coordinated action across government, industry, and education stakeholders, stressing that Malta’s long-term prosperity will depend on its ability to develop, attract, and retain talent.

The Human Capital Research Project represents the culmination of three years of research and dialogue and is intended to serve as a roadmap for future policy and strategic action.

The post Final Human Capital Report calls for urgent shift towards a quality-driven economy first appeared on The Malta Business Weekly.

The project consists of the construction of a 122 km alternating current subsea electricity interconnector, operating at a nominal voltage of 220 kV and a frequency of 50 Hz, with a transmission capacity of 225 MW. The cable will connect the Enemalta terminal station in Magħtab, Malta, to Terna’s substation at Contrada Cimillà in Ragusa, Sicily. The operation also benefits from earlier EIB Advisory support during project preparation, including the assessment of its financial and economic viability, ensuring the project’s maturity, financing eligibility and compliance with relevant EU requirements.

“The second interconnector is an important investment in Malta’s long-term economic stability. By strengthening our energy infrastructure, we reduce vulnerability to external shocks, improve supply security, and support stable energy prices for households and businesses,” Minister for Finance Clyde Caruana stated.

Scheduled to enter into operation in the first quarter of 2027, the interconnector will increase electricity interconnection capacity between Malta and Italy, enabling electricity imports from the EU market, strengthening security of supply and grid stability, and supporting demand growth and the integration of renewable energy in line with Malta’s decarbonisation objectives.

“Electricity interconnectors are essential to a secure, integrated and decarbonised European energy system. By backing Malta’s second interconnector with Italy, the EIB is strengthening energy security, facilitating cross-border electricity exchange and renewable integration, while ensuring that growing demand can be met in a reliable and sustainable manner. This project reflects the EIB’s key role in supporting strategic energy infrastructure across Europe,” EIB Vice-President Marek Mora stated.

The total project cost is estimated at 296.68 million euros, financed by EU funds under the European Regional Development Fund with 165.78 million euros, alongside the EIB loan and the Republic of Malta’s own resources. The EU Bank also provided advisory support through JASPERS, a joint initiative of the EIB and the European Commission, offering guidance on project design, procurement and implementation to ensure a robust technical framework and smooth delivery of this strategic infrastructure.

The Government of Malta will retain ownership of the assets. Interconnect Malta, a 100% government-owned company, is responsible for issuing tenders, implementing the project, and operating the assets under a public service obligation. The full interconnector capacity will be made available to Enemalta, Malta’s electricity distribution system operator, under a capacity agreement, with an annual tariff charged for its use.

The EIB in Malta

The European Investment Bank (EIB) has been supporting the Maltese economy since before the country’s accession to the European Union, with its first project signed in 1979 to help expand the commercial port of Valletta Grand Harbour. Since then, the EIB Group’s financing in Malta has exceeded €1 billion, aiding vital sectors such as SME access to finance, urban regeneration, climate action, and telecommunications. The EIB has also supported landmark infrastructure projects that have transformed the heart of Valletta, including the Parliament building and the open-air theatre at the City Gate. As the EU’s long-term lending institution, the EIB remains committed to promoting sustainable investment and fostering economic resilience in Malta and across Europe.

The post EIB backs with €100 million Malta’s energy transition through second electricity interconnector with Italy first appeared on The Malta Business Weekly.

Addresing the media, Caruana said that Malta’s national GDP is projected to keep increasing from €24.6 billion in 2025 to almost €34 billion by 2030. Forecasts indicate rates of economic growth of between 6-7% for each year, in nominal terms, till 2030, and real growth levels of around 4% annually throughout this coming half-decade. In 2030, the national GDP is forecasted to grow by 7.1% in nominal terms.

As national GDP looks to keep rising, the country’s burden of debt is projected to decrease by 0.6% each coming year, he said.

This information was given following the earlier announcement that Malta has lowered its budget deficit to 2.2% of its GDP, thus falling in line with EU fiscal rules as the country looks to emerge from its excessive budget deficit procedure after incurring recurrent excessive budget deficits.

By the end of 2026, the budget deficit is aimed to decrease to 1.6% of the national GDP, then down to 1.0% by the end of 2027, before being equivalent to 0.4% of the GDP by the end of 2028.

A minor budget surplus of 0.1% is forecasted for 2029 and 2030 respectively, he said

Caruana said that these projections do not include the implementation of the long-awaited national metro project. He told journalists on Wednesday that, at the moment, the metro’s financial feasibility is currently being discussed.

The metro was announced in 2021, some months prior to the 2022 general election. The original proposal for the national metro – a fully underground system – was set to cost the country €6 billion before being scrapped for a hybrid system (with parts underground and overground) worth half the original amount, now projected at €2.8 billion.

Minister Caruana had previously stated that the country would be “royally screwed” if it gets the metro project wrong. On Wednesday, he repeated this sentiment and said that budgets will be adjusted if the metro is to be included in the budget estimates for the coming five years.

The Finance Minister said that the national debt is set to moderately keep rising, in total terms, over the coming years. The national debt is currently measured at €11.4 billion, as of the end of 2025; by 2030, it is set to climb to €13.2 billion.

However, Caruana dispelled “scaremongering efforts” by the Opposition on national debt levels and assured that debt levels are under control.

“We are expecting the burden of debt in the country, till 2030, to decrease to below 40% – in spite of all the global challenges and assistance we are providing to families,” Minister Caruana said.

The burden of debt is set to decrease from 46.4% of Malta’s GDP in 2025 to 38.9% by 2030, reflecting a gradual reduction of 7.5%.

The reduction of Malta’s annual budget deficit to 2.2% of the GDP outperformed expectations outlined by Caruana himself during his last budget discourse. In the last annual budget, he had forecast a deficit rate of 3.3%.

This update shows that “the deficit has gone down substantially and convincingly” – well below the EU’s 3% threshold, as per EU fiscal rules.

Additionally, the national debt is “comfortably below” the EU’s recommended 60% mark, he said.

The Finance Minister said that a few months ago, through a constitutional court ruling that went in favour of national bank shareholders, the Maltese government had to pay out compensations worth a total of 0.3% of Malta’s GDP. He stated that if it weren’t for this ruling, last year’s deficit would have been calculated at 1.9% of the GDP, and so “this is a clear indication that the national deficit has gone down substantially.”

Caruana remarked that according to these forecasts, over the next five years, Malta’s burden of debt shall decrease to levels that haven’t been observed since the mid-1990s. He said that “this greatly contrasts the scaremongering of those attempting to ridicule the numbers, to try and say that our fiscal situation is out of control.”

Referencing Eurostat statistics published earlier in the day, Caruana said that in 2025, Malta recorded the tenth lowest burden of debt (i.e., debt as a proportion of the national GDP) among all 27 European Union Member States.

“If our country has so many issues, what do the other 17 countries ranking worse than us have?” he asked, dismissing criticisms against present fiscal handling.

He added that he remains optimistic that citizens “will not deal with any of the issues” caused by austerity policies that other countries have imposed onto their citizens. Caruana reiterated that implementing austerity measures can be counterproductive, as tightening the belt too much could lead national fiscal performance going down anyway if it results in consumption levels and economic activity reducing too much as a result.

Speaking against the PN Opposition’s criticisms of how national finances are being handled, Minister Caruana said that while the Opposition “is spreading discourses on the national debt like the country is on the verge of bankruptcy,” in his view, results will show “everything they have said is the fruit of their misunderstanding of how fiscal policies work.”

In this regard, he dismissed arguments that the Malta’s budget deficit should have gone down sooner, stating that “the deficit had to decline gradually so we don’t kill the economy.”

The Finance Minister said that following these positive results, his Ministry is now waiting for the opening week of June when the European Commission will recommend which countries can exit excessive budget deficit procedures. He said that this recommendation will be announced on 3 June and, on 10 June, EU countries’ finance ministers will vote to confirm these recommendations.

Minister Caruana observed that Malta has managed to reduce its budget deficit despite all the exogenous shocks that emerged in the 2020s so far, including the ramifications caused by the Covid-19 pandemic, Russia’s invasion of Ukraine, and the sustained turmoil in the Middle East that has recently worsened.

In 2020, due to the pandemic and the financial assistances provided to keep the country afloat during that period, the budget deficit was measured at 8.7% of the GDP.

On the subject of interest payments, another point of criticism by the Opposition, the Minister for Finance said that the burden of interest (i.e., interest payments as a percentage of the GDP) is currently sitting at around 1.2%. He noted that these are among the lowest levels observed in the past 30 years. At peak, in the year 2000, the burden of interest stood at just over 4.0%.

Caruana said that these financial estimates can be reached, noting that they are “conservative” estimates.

The post Government projects to balance its books by 2029 or 2030, Finance Minister says first appeared on The Malta Business Weekly.

Operators are reporting sustained diesel price inflation, with Italian retail prices exceeding €2 per litre. This has triggered significant cost escalation across the trailer and freight industry, with estimates suggesting additional weekly sector costs in the region of €80 million. Diesel, which typically accounts for 30% to 40% of operating costs, is now placing extreme pressure on carrier margins.

ATTO Chairman Joseph Bugeja said early signs of disruption are becoming more evident.

“Alongside sustained cost pressures, we are seeing isolated instances of fuel supply constraints in parts of Italy. While not yet systemic, these warrant close monitoring,” he said.

Member operators report increasing operational strain.

“To date we have not experienced systemic uplift failures, though drivers have occasionally encountered stations with limited availability,” said Antoine Vella of Express Trailers. “Rising diesel costs are now requiring continuous monitoring and rapid operational adjustments.”

He added that the volatility is increasingly affecting planning and network reliability.

“With vehicles operating across Europe, refuelling has become more critical and is adding complexity to daily operations. The uncertainty in the current environment could have significant implications for Malta’s logistics chain,” he said.

GMC Transport reported fuel cost increases of 20% to 30% over recent months, with margin compression of up to 40%. Director Mark Buttigieg said pricing pressure is now forcing urgent rate reassessments across client contracts.

Concorde’s Jonathan Vella said operators are responding with tactical mitigation measures.

“We are refuelling earlier, relying on larger motorway stations, and avoiding low fuel thresholds before entering Italy or France,” he said. “Even minor delays can now cascade into missed ferry schedules and trailer rotation disruption.”

He noted that cost inflation across EU corridors remains severe, with diesel up approximately 35% over three months and 37% over six months.

Meantime, the Italian government has introduced excise duty reductions and tax credits for transport operators to ease pressure on the haulage sector. However, industry feedback suggests these measures are being outpaced by the scale of cost increases.

At the same time, associations are raising concerns that part of the recent diesel price escalation may be driven by speculative pricing dynamics, amplifying volatility beyond underlying market fundamentals and intensifying financial strain across operators.

More broadly, the Italian haulage sector is facing liquidity pressure due to rising costs and 60–90 day payment cycles, increasing the risk of rate renegotiations, service reductions, and potential operational disruption.

ATTO also noted that pricing transmission across Europe remains uneven due to differing taxation systems and policy interventions, contributing to corridor volatility.

Bugeja emphasised Malta’s structural exposure as a fully import-dependent island economy.

“With no overland alternatives, Malta is entirely dependent on the reliability of European transport corridors. Around 55,000 trailer movements annually underpin national trade flows, and any sustained disruption, whether it’s cost-driven or physical, can rapidly impact economic stability,” he said.

ATTO concluded that while domestic fuel pricing measures offer partial insulation, Malta remains exposed to external corridor volatility, as most absolute fuel uplift occurs outside the country. The association will continue to monitor developments closely and engage stakeholders where necessary to safeguard supply chain continuity.

The post Escalating fuel cost and emerging strain along European routes leading to serious logistics concern first appeared on The Malta Business Weekly.

The majority of visitors, 224,757, travelled for holiday purposes, while 14,600 arrived for business. Travellers aged 25 to 44 accounted for the largest share at 35.7 per cent, closely followed by those aged 45 to 64 at 35.0 per cent. Nearly half of all arrivals (49.6 per cent) came from the United Kingdom, Poland and Italy.

Total nights spent by tourists rose by 10.3 per cent year-on-year, reaching 1.4 million. Most guest nights (90.5 per cent) were spent in rented accommodation, while the average length of stay stood at 5.5 nights.

Tourist expenditure for the month reached €171.7 million, marking a 16.9 per cent increase over February 2025. Average spending per night was estimated at €125.8.

Meanwhile, 103,579 tourists visited Gozo and Comino — either as day-trippers or overnight guests — representing 41.6 per cent of total arrivals.

January–February Overview

In the first two months of 2026, inbound tourists totalled 484,911, up by 19.9 per cent compared to the same period last year. Total nights spent rose by 16.1 per cent to 2.7 million.

Tourist expenditure reached €350.6 million, an increase of 21.1 per cent year-on-year, while per capita spending edged up to €723 from €716 in 2025.

Visits to Gozo and Comino during this period totalled 197,080, accounting for 40.6 per cent of all tourists.

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