As Malta Plans Economic Recovery, What Will Be the Main Growth Drivers?

Much like many other countries around the world, 2020 has not been a banner year for the Maltese economy. The island nation is expected to see a 5.4% economic retraction this year, in line with predictions for many other European countries. However, Malta's leaders remain optimistic, as do the financial pundits, who predict a quick bounce back to growth in 2021 for the tiny country.

Malta has been something of an economic success story for the past decade, following years of stellar growth and record investment. Let's take a closer look at the levels of the Maltese economy, to see what the main drivers of growth will be in the year ahead.

Tourism

There is no denying that tourism is the bedrock of Malta's economy, responsible for 15% of GDP and billions of euros in revenue. One of Malta's effective tourism strategies that we will likely see more of in the coming months is the hyper-focused targeting of specific demographics of travelers. It has emerged in just a few short years as one of the most significant destinations for LGBT+ travelers in the world, thanks to concerted efforts from the Maltese Tourism Board to appeal to this group. We will likely see similar efforts to other demographics going forward.

Shipbuilding

Shipbuilding has been a part of the Maltese economy for centuries, and will likely be pivotal to future growth. While traditional shipbuilding is not exactly a big moneymaker in today's economy, the construction of luxury yachts, which Malta has plenty of experience in, is an extremely high-growth market. Demand for luxury sailing vessels has skyrocketed in recent years, with the market almost doubling from $5.7 billion to $10.2 billion a year over the past decade. Malta's several luxury shipbuilding companies will likely have their order books full in the future.

Online Gambling

Another major contributor to the Maltese economy is the online gambling industry, which employs thousands of people and generates billions of dollars in revenue for the island's coffers every year. This is largely due to concerted efforts from the Maltese government to attract global online casino companies to set up shop on its sunny shores. Major platforms such as LeoVegas, which provides popular online jackpot slots to players in dozens of countries, is just one example of a global online gambling provider that has a presence in Malta today.

Residency and Citizenship Initiatives

Malta has a world-famous residency and citizenship scheme that allows investors to stay in the country and gain access to an EU passport in exchange for their business. The Citizenship by Investment scheme run by the government allows individual investors who deposit €650,000 in the Maltese Investment Bank to receive long-term residency, with the option to receive a passport further down the line. Similar schemes are also available to these who purchase a property in Malta with a value of €350,000 or more. Thousands of people have taken advantage of the schemes, to the extent that it has become one of the major contributors to Malta's real economy.

As Malta slowly returns to economic growth, these are likely to be the main drivers of it. Watch this space to see how things develop.

This article does not necessarily reflect the opinions of the editors or management of EconoTime