Still solid but many challenges ahead

A1

LOW RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD14.65bn (World ranking 126, World Bank 2020)
Population 0.53mn (World ranking 171, World Bank 2020)
Form of state Republic
Head of government Robert Abela (PM)
Next elections 2022, Legislative
  • Strong economic and robust employment growth before the outbreak of the Covid-19 pandemic
  • Investor-friendly tax regime with considerable tax exemptions and incentives, which compensate for a relatively high corporate tax rate
  • Solid public finances and favorable household and corporate debt levels
  • English-speaking productive workforce, relatively low labor costs compared to other EU members
  • High trade openness entails vulnerability to an unstable external environment
  • Strong export dependence, especially on electrical machinery and equipment (mainly semiconductors) and petroleum
  • Brexit and the Covid-19 pose major risks to tourism industry (high number of UK arrivals)
  • Growing size of the strongly internationalized financial sector while being listed as (cooperative) tax haven by the OECD
  • Needs structural reform in R&D and human capital training to raise growth potential

Trade structure by destination/origin

(% of total, 2020)

Exports Rank Imports
Germany 12.1%
1
12.7% Italy
Singapore 9.0%
2
11.5% Russia
France 7,2%
3
10.2% Korea, Republic of
Italy 5.7%
4
8.8% China
China 5.7%
5
5.2% United Kingdom

Trade structure by product

(% of total, 2020)

Exports Rank Imports
Electrical machinery, apparatus and appliances, n.e.s. 28.7%
1
25.3% Petroleum, petroleum products and related materials
Miscellaneous manufactured articles, n.e.s. 13.5%
2
23.1% Other transport equipment
Medicinal and pharmaceutical products 12.3%
3
6.0% Electrical machinery, apparatus and appliances, n.e.s.
Petroleum, petroleum products and related materials 10.9%
4
4.3% Organic chemicals
Other transport equipment 5.1%
5
3.6% Medicinal and pharmaceutical products
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