Malta is on track to exit the European Union's excessive deficit procedure earlier than expected, with the country's deficit expected to stand at the 3% limit by the end of 2026, Finance Minister Clyde Caruana said.

He also announced that government has also revised this year's projected deficit downward from 3.5% to 3.3%.

Caruana spoke at a press conference on Tuesday where he said that in the coming October, when  announcing the Budget for 2026, he will announce that next year, the 3% deficit goal will be "comfortably achieved," meaning that the timeline for Malta to exit the excessive deficit procedure is closer than scheduled or anticipated.

He referred to National Statistics Office and Eurostat statistics which were published on the debt and deficit figures of each country, for the year 2024.

Caruana said that at the end of this month, government will present its plans to the European Commission with more updated figures which shed a positive light on how the government's finances will develop this year.

The latest data shows that the national deficit for 2024 was 3.7%, improving by 0.8 percentage points over the budgeted 4.5%, the government said. It added that similarly, the debt-to-GDP ratio fell to 47.4%, significantly lower than the projected 55.3%, "marking a sharp 7.9 percentage point improvement."

He continued that the new regulations announced last year required countries to make an effort to at least reduce the deficit by 0.5%.

"We exceeded that effort in a manner that the deficit was reduced by 0.8%," Caruana said.

He added that the country's debt is under control, and the country's finances are "more than on track" which will see the deficit continue decreasing without government having to introduce new taxes or stop energy subsidies.

"This will lead us to leave the excessive deficit procedure earlier than we thought, without increasing any burdens for the Maltese and Gozitan public," Caruana said.

He continued that despite government maintaining energy subsidies, and despite inflation, the country's debt is decreasing, and "we are safeguarding the economy, not endangering sustainability of the country's finances, and abiding by the regulations as agreed upon by all EU countries' Finance Ministers."

Caruana said that this gives peace of mind to credit rating agencies and investors, that the fiscal position of the country, and that of government, is a sustainable one.

Caruana said it is not only important to keep the debt below the 60% threshold, but government will fulfil an extra step, to keep it below 50%, so that it could have enough buffer to withstand any future shocks.

He said that the deficit of the country is also decreasing slowly, and today's published figures show that the 4.5% projected deficit for 2024 was actually 3.7%.

The deficit for this year was projected to be at 4%, Caruana said, as he had announced in the last Budget, which was then revised to 3.5%.

Now, government will be revising this figure downwards to 3.3% deficit for this year. Caruana said this debunks any "stories" which said that the government's income has been struggling.

"We would not have been so confident that we can reach a better and new target which leads us closer to the 3% otherwise. We have a new target, better than last year's Budget," Caruana said.

Government will continue to sustain energy prices, implement its electoral programme as well as grant the public a substantial tax cut, something other EU countries have not done, which shows the government's "wise fiscal policy," Caruana said.

He continued that the country is reaching results it had not anticipated it would reach before. Caruana said government is bearing the fruit of its income, without adding taxes and with a fast-growing economy.

As compared to the other EU countries' debt, Caruana said that Malta remains at least 30 percentage points lower than the EU average. He said that the smallest country's fiscal policy is allowing it to continue doing what it is doing, and putting Malta on a stronger position to face any future challenged.

"This shows the need for us to continue our wise fiscal policy to continue resulting in more economic growth for our country," Caruana said.

He also said that between 2019 and 2024, Malta well exceeded the average level of quality of life in the EU, and is being kept at almost 10% more than other EU countries.

Caruana said that Malta's quality of life exceeds the EU average, while the debt remains 30pp less. The deficit continues to decrease at a faster rate than expected, all the while government continues helping businesses and sustaining energy prices, he said.