Finance Minister Clyde Caruana told Parliament on Wednesday that, according to present indications, the government has already managed to lower its budget deficit to below the EU's stipulated 3% threshold.

Minister Caruana noted that official results will be published later this April, though if these indications hold true, then this would mean that Malta has managed to comply with the fiscal mission demanded by the EU's excessive deficit procedures opened against the country mid-way through 2024. He did not reveal the exact figures behind these internal indications.

"[The 3% deficit mark] will not only be reached, but indications are that we will go over and above. We will go below the 3% mark actually," Minister Caruana declared.

The Minister for Finance noted that during Budget 2026, last October, he had said that Malta will reduce its national budget deficit to below 3% of its total production in 2026, "though indications show that we accomplished this in 2025 already; it means that our aims are being reached early," he said on Wednesday.

In June 2024, the Council of the European Union launched excessive deficit procedures against Malta and seven other EU countries in a bid to control year-on-year government spending. In 2023, Malta had reported a budget deficit of 4.9% when EU treaties demand for EU Member States to keep their deficit below 3% of their GDP. A country incurs a budget deficit when its government's expenditure proves to be greater than its revenue.

According to Malta's Minister for Finance on Wednesday, Malta has managed to decrease its budget deficit to below 3% in 2025. Minister Caruana observed that Malta had four years to reach this mark, though if indications are correct, this fiscal mark was reached after just two years.

In April 2025, Caruana stated that Malta was on track to exit the EU's excessive deficit procedure earlier than expected. Back then, he shared that fiscal forecasts predicted for Malta to lower its budget deficit down to the 3% mark or less by the end of 2026.

Caruana's update on Wednesday, 21 January 2026 would mean that the Maltese government has hit the targeted 3% deficit mark a year earlier than expected - a significant result considering that initial government forecasts had projected the country's deficit to go down to 3.5%, before being revised in April 2025 to 3.3%.

Caruana has long dismissed worries on Malta's capacity to these excessive deficit procedures and has consistently reiterated that Malta will "comfortably" manage to abide by EU fiscal rules.

He remarked that over the next two years - since Malta was given four years to correct its excessive budget deficit - "the budget deficit will be fully corrected." He said this will be accomplished by continuing to reduce the burden of taxes, by increasing pensions, and letting the economic machine function. This way, he said, "the burden on the national debt will continue to decrease."

"Malta's fiscal situation will not only remain as it is, but it will continue to prosper - what a difference to other [EU] countries," Caruana said, citing present financial difficulty in other EU Member States.

EU fiscal rules also oblige Member States to keep their national debt below 60% of their respective GDP.

Minister Caruana told the Chamber of Representatives on Wednesday that today, Malta's debt-to-GDP ratio sits below 50% and continues to decrease. He affirmed that the national debt has not spiralled out of control as implied by the PN Opposition, despite its repeated "scaremongering" that the national debt continues to hit new all-time highs.

Caruana observed that five years ago, before the pandemic, Malta registered the tenth-lowest burden of debt in the EU. Today, Malta still holds the tenth-lowest burden of debt, he said.

The Finance Minister acknowledged the Opposition's discourse that Malta is paying more and more in interest payments on the ever-increasing national debt, though also quashed all qualms on this. Caruana said that before the pandemic, interests paid on the national debt were equivalent to 1.2% of the country's GDP and that this rate of 1.2% has been since retained. He added that these interest payments also rank healthy versus other EU countries.

"This government's fiscal decisions have resulted in economic growth in a way where people living in Malta are faring better than other European citizens; the burden of debt is decreasing; and the level of interest payment on the national debt has remained the same," Caruana said.

During his speech, Minister Caruana rebuked the Nationalist Party's fiscal policies and its criticisms on Maltese finances.

"I don't like attacking, but I don't think that the PN has grasped an idea of having responsible fiscal policies for the country - its criticisms are clearly political, but poor from a technical lens. The numbers I've mentioned do not substantiate the Opposition's claims," he said.

While speaking against the PN Opposition, he reproached them of not having solid financial understanding, noting that since 2020, the party has had four different spokespersons for finance - all of which, Caruana said, had "got it wrong." Caruana also expressed doubt that a PN government would have been able to keep the Maltese economy afloat as the incumbent administration has during the exogenous shocks that have impacted the country over Prime Minister Abela's tenure.

"If I had to give the Opposition advice, I'd say fire whoever is giving you financial advice," Finance Minister Caruana stated.

He continued that PN's consistent scaremongering on national finances, while the country continues to experience positive results, "consistently does not bear its fruit, resulting in PN losing credibility."

"After five years, the Opposition has still not managed to find itself a credible spokesperson for the country's finances - and I don't think it will find one," Minister Caruana said.

Caruana ensured that the government's fiscal policies are not for show, but have substance and are exactly what the country needs. In contrast, he said that the Nationalist Party has "no idea" on how to handle Malta's fiscal situation.

The Finance Minister mentioned that Malta's stable and growing economy, especially while other European countries are experiencing financial struggle, is allowing for Malta's competitiveness to improve as the country grows more attractive to foreign investors.

Caruana said that local employers should be incentivised to invest more in technology to boost their competitiveness. He said that the Maltese government will continue reducing taxes and supporting the elderly since this is not only empowering the country to be "stronger and better," but because these measures are not, at least for now, being detrimental to the country's finances. "If that were the case, I'd be the first person to leave," he noted.

He concluded that while statistics speak for themselves for the government, "the Opposition still doesn't know what it wants or how it can serve as a better alternative for government than what we have. It doesn't have better ideas to present to improve the country's fiscal position."