Malta: 2015 Article IV Consultation-Press Release; and Staff Report

IMF Staff Country Reports, January 20, 2016

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The 2015 Article IV Consultation highlights that Malta’s economy is growing strongly.
Real GDP growth has been one of the highest in the euro area since the beginning of the crisis.
Growth drivers cited include vibrant domestic demand, large infrastructure projects, and a stable banking sector.
Unemployment is at historical lows, and labor participation is increasing.
The current account remains in surplus, and the external position is broadly in line with fundamentals.
Growth is expected to remain solid in 2016–17, driven initially by domestic demand and later by a gradual recovery of external demand.
Inflation is projected to pick up gradually owing to the positive output gap and higher imported inflation on account of the weaker exchange rate.

Real GDP growth: described as "one of the highest in the euro area since the beginning of the crisis."
Domestic demand: characterized as "vibrant" and a primary near-term growth driver.
Large infrastructure projects: identified as a significant support to economic activity.
Banking sector: described as "stable," supporting macro-financial stability.
Labor market: unemployment at historical lows; labor participation is increasing.

Current account: remains in surplus.
External position: broadly in line with fundamentals.
Inflation outlook:
- Projected to pick up gradually.
- Drivers: positive output gap and higher imported inflation due to a weaker exchange rate.

Growth outlook: expected to remain solid in 2016–17.
- Near term: driven initially by domestic demand.
- Later period: driven by a gradual recovery of external demand.
Inflation outlook: gradual pick-up tied to domestic demand pressures (positive output gap) and imported inflation from exchange rate developments.

Subjects: Aging, Banking, Financial institutions, Income, Labor, Labor markets, National accounts, Nonperforming loans, Population and demographics
Keywords: Aging, bank, consultation discussion, CR, financial market, financing, Global, growth financing, IMF staff estimate, Income, ISCR, Labor markets, Malta, Malta's economy, Nonperforming loans, SDDS preparation, summary trade statistics, upside risk, volume estimate

International Monetary Fund. Malta: 2015 Article IV Consultation-Press Release; and Staff Report (IMF Staff Country Reports 2016, 020).