PwC Malta's latest economic update indicates that Malta's economic growth eased in 2025 as a result of a slowdown in productivity. The report states that while the Maltese economy continues to lead the Euro Area, "the gap between Malta and the Euro Area is narrowing."

PwC Malta's economic analysis, which pertains to spring 2026, notes that despite Malta's GDP growing by 4.0% in 2025, this is a notable slowdown from the 6.2% GDP growth experienced the previous year. Adding this with the fact that the Euro Area's growth has increased from 0.9% in 2024 to 1.4% in 2025, it noted that Malta's economic results are trended to converge with the rest of the Euro Area.

"While Malta still outpaces the EU average, the gap is narrowing as domestic momentum softens somewhat and the eurozone rebounds slowly," PwC Malta stated.

When looking into the country's growth in economic expenditure, PwC found that throughout 2025, "expenditure growth in Maltese economy was mostly in the restaurants and hotels sector, followed by education, ICT, recreation, and health sectors. Meanwhile, expenditure growth on food and beverages, personal care, and alcohol and tobacco was slower."

The auditing firm stated that when analysing further, "on a per-capita basis, the convergence is more evident." It observed that in 2025, GDP per capita in Malta rose by 1.6% while consumption per capita increased by 1.2% - both of which align with Euro Area averages, indicating "a shift from exceptional to more moderate growth."

"The most notable finding is the slowdown in productivity," PwC Malta said.

Delving into Malta's decelerating productivity, PwC noted that gross value-added (GVA) per worker "grew by only 1.4% in 2025," which is a significant dip from the 5% recorded the year prior.

In this regard, PwC Malta found that with GVA per worker in Malta currently standing at around €67,000, in comparison to the €83,000 GVA per worker in the Euro Area, "this slowdown prompts questions about the sustainability of Malta's long-term growth advantage."

The report's findings stress "a structural imbalance" in the Maltese economy, noting that "some of the fastest-growing sectors are among the least productive, while higher value-added sectors are underperforming."

PwC Malta highlighted ICT, wholesale and retail, and the public sector as the Maltese economy's strongest performers.

It identified slower growth, i.e., below 2%, in the professional services, finance, construction, and arts and recreation sectors. In addition, "manufacturing and real estate were more or less flat."

"Productivity by sector remains uneven, with ICT leading at €162k GVA per worker, followed by professional services (€93k) and finance (€76k). Wholesale and retail, construction, and the public sector are at the lower end of the value-added spectrum," PwC Malta said.

The report concludes that over the past decade, "economic activity in Malta always outstripped Malta's population growth, such that, on a per capita basis, the economy continued to grow at robust rates. However, it would appear that in 2025, such growth on a per-person basis is starting to flatten." It also reads that Malta's long-term growth ultimately depends on growth in productivity, which in 2025 appears to have flattened. In fact, at a sectoral level, the more productive sectors appear to be underperforming the economy, with the lower productive industries exhibiting some of the faster sectoral growth rates."

PwC Malta's Territory Senior Partner, Lucienne Pace Ross, stated that this economic analysis "depicts an economy that is resilient yet recalibrating."

"Malta continues to outpace its European peers, but the combined effect of slowing headline growth, flattening per-capita indicators, and weaker productivity gains suggests that the drivers of past growth are losing steam," Pace Ross said.

She suggested that to sustain long-term competitiveness, "Malta must focus on improving productivity and supporting higher value-added sectors."