Malta: 2020 Article IV Consultation-Press Release and Staff Report

IMF Staff Country Reports, April 10, 2020

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The 2020 Article IV Consultation focuses on Malta’s near and medium-term challenges and policy priorities and was prepared before coronavirus disease 2019 became a global pandemic and resulted in unprecedented strains in global trade, commodity and financial markets.
Pursuing structural reforms is expected to help sustain Malta’s growth performance while promoting social inclusion.

Structural reforms are needed to:
- Encourage female and elderly participation in the labor market.
- Upskill the labor force.
- Stimulate innovation.
Governance shortcomings remain and should be addressed without delay to safeguard the business climate, specifically:
- Step up the fight against corruption.
- Increase the efficiency of the judicial system while ensuring its independence.
Access to affordable housing needs improvement as a key priority to support greater inclusion.
Fiscal stance and management:
- It is imperative to maintain gradual consolidation to ensure a balanced structural budget excluding proceeds from the Individual Investor Program.
- Continue addressing infrastructure needs while upgrading public investment efficiency.
- Improve fiscal risk analysis and management.

Labor market and human capital:
- Promote policies to increase female and elderly labor force participation.
- Invest in upskilling programs and measures to stimulate innovation.
Governance and rule of law:
- Intensify anti-corruption efforts.
- Enhance judicial efficiency while preserving judicial independence.
Inclusion and housing:
- Improve access to affordable housing as part of inclusion strategy.
Fiscal policy and public investment:
- Maintain gradual fiscal consolidation to achieve a balanced structural budget excluding proceeds from the Individual Investor Program.
- Continue addressing infrastructure needs with a focus on upgrading public investment efficiency.
- Strengthen fiscal risk analysis and management frameworks.