Prime Minister Robert Abela said on Thursday that Malta "will absolutely not return to excessive deficit procedures," while assuring that national finances are trending positively and are forecasted to improve over the coming years.

During a press conference on Thursday afternoon about the state of Malta's overall financial situation, the Prime Minister and Minister for Finance Clyde Caruana, commended their government's approach to protect Maltese residents and businesses from global economic shocks while seeing that the Maltese economy continues to grow.

Abela praised how the country managed to emerge from the EU's excessive deficit procedure (EDP) after just two years, especially when Maltese authorities had agreed with the European Commission to arrange its financial situation and reduce its excessive budget deficit to below 3% of Malta's GDP in not later than four years.

While responding to journalists' questions on Thursday afternoon at Castille, Abela said that "absolutely, we will not go back in the excessive deficit procedure."

On top of this, he said that Malta was registering budget surpluses before the Covid-19 pandemic broke out and that "there is no concern" from the government's end that Malta will be placed back in the EU's EDP to, once again, resolve its fiscal situation.

On Wednesday this week, the European Commission confirmed that Malta met its fiscal targets ahead of schedule to become the first EU country to no longer fall under excessive deficit procedure from the countries placed under it in 2024.

This fiscal exercise exists so that EU countries avoid running excessive government deficits and accumulating excessive debt; all EU Member States are obliged, according to the EU's treaties, to maintain a debt-to-GDP ratio not exceeding 60% and for countries' deficit ratio (with respect to their GDP) to stay within the 3% threshold.

Abela said that under his government, not only has Malta been removed from the EU EDP early, but its budget deficit has decreased to 2.2% while the average budget deficit for the European Union currently stands at 3.1%.

In addition, Malta's burden of debt stands at 46%, though is targeted to drop to 40% across this legislature.

Finance Minister Clyde Caruana said that in contrast to Malta leaving the EDP early, the European Commission is observing that by next year, 2027, virtually half of all EU countries - 13 of the EU27 - will be in excessive deficit procedure.

He added that, according to the Commission's recently published spring forecasts, it is likely for budget deficits across Europe to continue worsening, except for Malta's.

Abela said that all this was only possible because his government opted for "progressive" policies, like the famous energy subsidies, to shield people and businesses in the Maltese islands from the economic turbulence being felt around the world as a result of stormy geopolitical situations.

He said that had Malta decided to handle its finances, following the pandemic, through austerity policies like "others" had suggested, then Malta - instead of having a blossoming economy - might still be in the EU excessive deficit procedure, among other struggling EU Member States.

"If we didn't take this direction, we might still be in excessive deficit procedures with other struggling EU countries," Abela said.

In this regard, he stated that "other [EU] economies are not growing at all" while Malta is forecasted to register an annual economic growth rate of 4% - which marks it as the EU's fastest-growing economy till 2027.

As an example, the Prime Minister mentioned that Spain currently registers an unemployment rate of 9.9%, while Malta's unemployment rate presently sits at around the 3% mark.

He added that as the Maltese economy continues to expand, more wealth will trickle down to the rest of the country. Abela assured that his PL government's mandate - through its "Int Malta" electoral programme - is clearly costed and financially responsible in a manner that respects set-out long-term economic targets.

Caruana said that Malta's budget deficit has decreased by an average of 1.3% per year since it was placed under the excessive deficit procedure in 2024. At the time, Malta ran an excessive budget deficit of 4.9% of its GDP.

Caruana said that in the coming years, the government plans to continue lowering the budget deficit by 0.6% each year, i.e., at half the rate of the last two years, to conservatively compensate for exogenous shocks and for the implementation of the Labour Party's electoral manifesto, on which it just got elected for a record fourth consecutive term.

He added that the burden of debt will continue to decrease to levels unseen in decades, according to the government's economic forecasts.

"I expect that in the next four years, this financial burden is taken back to levels last recorded some 30 years ago," Caruana said