The Labour Party secured a fourth consecutive election victory on 31 May, winning 51.8% of the vote and a majority of 21,721 votes. The Nationalist Party received the support of 44.7% of the electorate, while third parties collectively obtained 3.5%.
The initial projected vote gap between the two major parties was 18,000, a reduction of over half from the 2022 general election. However, the final tally released by the Electoral Commission indicates a gap of 21,721 votes, still representing a decrease of 3.34% for Labour.
Based on the latest EU country report, Malta fared well. The report states that growth is driven by private and public consumption and is further supported by a solid performance in key export sectors. Real GDP grew by 4.0% in 2025 and is forecast to grow by 3.7% in 2026. The contribution of net exports to growth is positive, resulting from large net positive services trade outweighing the negative balance of trade in goods. More pronounced effects of labour shortages, capacity constraints, such as land-use limitations and infrastructure bottlenecks, together with an expected slowdown in external demand, are set to weigh on growth momentum. Despite these factors and the current geopolitical uncertainty, real GDP growth is expected to remain robust.
Obviously, based on this electoral result, one cannot suddenly give jolts to the economy based on a myriad of electoral promises made by the Labour Party in its quest to curry favour with party faithful. Therefore, caution is needed in deciding how to proceed.
Critics insist that we first need to go through a process of transformation, as we have done a number of times in the past. Some writers state that we also suffer from the cultural equivalent of the Napoleon syndrome by compensating for our small geographical size through being excessively belligerent, hostile, or quarrelsome in our interpersonal relationships.
Yet, in all honesty, with just 62 years since Independence, we have scored highly in many aspects - we have punched above our weight. Small is indeed beautiful, as long as illusions of grandeur do not blur our vision. Our limitations are what they are, and we cannot hide them. Yet we need to look for niches such as renewables and new streams within the growing AI business.
Quoting Andreas Weitzer, a local writer on many topics, he reminds us of our densely populated urban environment. Therefore, in the near future, the shift to EVs makes perfect sense. Places like Malta would profit enormously from going electric in car transport.
Certainly, learning from the traffic-calming experiment in Wuhan, China, shows how the use of robotaxis has reduced congestion in the city and is slowly becoming a mainstream means of commuting for residents. The expanded future use of robotaxis here (which drive with a safety driver) could dramatically reduce the need for 8,000 Y-plate cars and possibly hundreds of scooters delivering food - all of which currently clog our narrow streets.
Another important topic is the urgency of shifting to electric cars to improve air quality and reduce harmful carcinogenic fumes from ICE-powered transport.
Among the various renewable options, wind energy stands out as a particularly promising one for Malta, especially if we succeed in securing the use of the shallow waters at Hurd's Bank. Delaying investment in wind energy could have significant negative repercussions for the environment, the economy, and Malta's energy security.
Since stopping the burning of coal, we have focused entirely on LNG and on purchasing electricity through the interconnector from Italy, much of which is generated from fossil fuel sources. In the past, Malta's reliance on fossil fuels contributed significantly to its carbon footprint. Now, with a booming tourist industry and the massive importation of TCNs, we owe it to ourselves to improve our living conditions.
One may remember the improved air quality during the two years of COVID due to reduced traffic and the temporary closure of both ports. Cleaner air contributes to a healthier population and lowers healthcare costs. Unlike other forms of extracted fuels, wind energy does not harm the environment and may open future avenues of export once surplus electricity is used to produce by-products such as hydrogen and ammonia through electrolysis.
Solving our internal power-generation challenges may eventually bring an end to the power cuts experienced by Enemalta. Meanwhile, the number of new electricity meters installed each year by ARMS Ltd. has continued to rise, with over 290,000 electricity meters installed by 2014, a figure that has now risen to upwards of 380,000.
Meanwhile, a recent PwC country report shows remarkable statistics. In fact, the report discovered that official GDP data for Q1 suggest a marginal slowdown in Malta's quarterly GDP growth, down from 8.7% in Q1 2022 and 6.4% in Q1 2023 to 4.6% in Q1 2024.
What constitutes this slowdown? PwC states that it is broad-based. The slowdown in output affected manufacturing, ICT, professional services, and retail, all of which slowed during the first quarter of 2024. On the bright side, real estate and construction registered upticks in performance.
Again, quoting the seminal report by PwC, one observes pockets of business decline, indicating broader pessimism about the economic environment. On the fiscal side, Malta has been running some of the highest deficits in Europe since COVID.
Moving on to the elephant in the room - tourism. This year, as in many Mediterranean resorts, we expect a flood of low-value visitors, often styled as "hamburger tourists". Tony Zahra, the long-time president of MHRA, senses overcapacity in bed stock and urges that planning approvals for new hotels and extensions must stop.
He notes that the Planning Authority is expected to approve 27,000 new rooms, requiring an additional 15,000 staff. He laments the dire consequences for drainage, electricity demand, transport, and housing, and calls on Castille to seek a durable solution.
Again, this brings up the issue of quality versus quantity in the tourism sector - an issue that has remained an enigma since shortly after Independence in 1964, when Malta attracted a modest 180,000 tourist arrivals.
In conclusion, the low-hanging fruit has already been picked and, following Labour's re-election, the country needs to reach for higher branches. The patient needs help from the invisible hand, as described by Adam Smith, the famous eighteenth-century Scottish economist.
George M Mangion is a Senior Partner at PKF Malta