The European Commission's winter forecast projects Malta to have the highest economic growth in the EU in 2022

Malta's Real Gross Domestic Product is expected to grow by 6% this year, dropping to 5% growth next year.

"Malta is expected to reach pre-pandemic levels of economic activity around mid-2022," the EU documents read.

"A limited downside risk remains related to possible consequences of the June 2021 decision of the Financial Action Task Force (an intergovernmental body against money laundering) to add Malta to the list of jurisdictions under increased monitoring (the greylist)."

Compared to the rest of the EU in terms of inflation, Malta increased only moderately for last year. "The authorities have expressed a continued effort to limit energy prices growth for this year."

However, the documents highlights that the increase in food, transport and imported goods prices and a gradual recovery in the tourism and hospitality sectors are set to drive up price pressures in 2022.

In total, it is expected that inflation will go up by 2.1% for this year, followed by 1.9% for 2023.

As for the European economy as a whole, it opened the year on a shaky note as it did not match previous projections; despite this, it still managed to recover its output level existent pre-pandemic. Economic growth is expected to recover its pace in the second quarter of this year, where it is also expected to remain matching or above the projected forecast of 4%  in the euro area for this year, the documents show.

The fast spread of the omicron variant has led to pressures on the healthcare systems with a never-seen-before growth in absences from work in multiple European countries. Because of this, many countries have had to re-evaluate their Covid-19 led restrictions.

It is forecasted that the pressure caused on the European economy in general, caused by the current wave of the pandemic, will be a short one, whilst the expected inflationary pressures that follow are forecasted to become moderate by the end of this year.