Inflation expected to be 4.3% in 2023, EU forecast finds; PM says it will be among lowest in EU

Last Updated on Monday, 13 February, 2023 at 5:53 pm by Andre Camilleri

Inflation in Malta is expected to reach 4.3% in 2023, which is lower than the 6.1% experienced in 2022 according to the European Commission’s Winter Forecast.

It read that Harmonised Index of Consumer Prices (HICP) inflation in 2022 reached 6.1%, despite energy prices being kept at 2020 level by government intervention. “The Maltese authorities announced that they will continue limiting energy inflation in 2023 and 2024. Nonetheless, inflation in 2023 is set to remain elevated at 4.3%, due to continuing pressures in food, transport, and imported goods prices. In 2024, inflation is expected to subside to 2.4% as imported price pressures are also set to moderate.”

In terms of real GDP growth, in Malta in 2022 it is estimated to have reached 6.6%, which is higher than projected in autumn, the forecast read. “The economy showed strong growth in both private and public consumption, which were partially offset by a decrease in gross fixed capital formation.

In addition to strong performance by the services sectors in general, the export of tourism services in 2022 rebounded quickly, both in terms of total number of visitors and tourism expenditures, contributing to overall positive economic results.”

It read that in 2023, real GDP is forecast to grow at a slower pace, by 3.1%, following a wider economic slowdown in Malta’s main trading partners.

“In 2024, real GDP growth is expected to reach 3.7%, supported by net exports and growth in domestic demand. The strong impulse to growth from the recovery in tourism is however set to moderate in 2024, as tourist flows approach pre-pandemic levels.”

Prime Minister Robert Abela said the following: “In its Winter forecast, the European Commission made an upward revision of our economic growth last year and predicts the second largest growth for this year and next year. Inflation will remain amongst the lowest.” The government “will continue to support and invest in our people,” he added.

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