The Malta Fiscal Advisory Council is pleased to present its Annual Report and Statement of Accounts 2025. This year’s report not only provides a comprehensive overview of the Council’s work during the past year, but also features two thematic research chapters that strengthen the analytical toolkit of the Council and contribute to policy-relevant debate.
🔍 Key highlights include:
📊 A first of its kind Economic “Heatmap” for Malta - A forward-looking monitoring tool designed as an early-warning system to track emerging economic developments, enhancing the Council’s ability to assess risks and spot imbalances in a timely and structured manner.
💸 A COFOG-based analysis of Government Expenditure - A detailed examination of how public spending in Malta has evolved over time, identifying structural shifts across sectors and providing important insights on the drivers of expenditure growth.
💬 As noted by the Chairperson, these thematic contributions aim to support stronger fiscal governance, improve surveillance, and inform policy discussions, particularly in light of evolving EU fiscal rules and growing pressures on public finances.
📖 Read the full report here:
Malta Fiscal Advisory Council
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Malta's Independent Fiscal Institution The MFAC is independent in the performance of its functions.
The main purpose of the Malta Fiscal Advisory Council (MFAC) is to review and assess the extent to which the fiscal and economic policy objectives proposed by the Maltese Government are being achieved and thus contribute to more transparency and clarity about the aims and effectiveness of economic policy in Malta. Our mandate
- monitor and assess whether any Government obligation regarding the bu
26/02/2026
Earlier this month, Chairperson Dr Moira Catania attended the EU Independent Fiscal Institutions (IFI) Conference held in Nicosia, entitled “Fiscal Management in Changing Times: The Initial Responses.” The event brought together representatives of national IFIs from across EU Member States, alongside government officials, academics, and financial sector professionals.
Discussions focused on the evolving challenges facing IFIs and explored potential strategies to address them. The critical role of productive public expenditure in supporting long-term economic growth was emphasised. The conference also examined the fiscal implications of heightened geopolitical tensions, including rising defence spending and shifts in investor behaviour.
The importance of effective communication was highlighted, stressing the need for IFIs to clearly convey their role, analysis, and recommendations to the wider public to strengthen their capacity to fulfil their mandates.
Member States’ progress in transposing the new EU Economic Governance Framework was reviewed, with the extent of transposition varying across countries and IFIs being involved to differing degrees in the process.
14/01/2026
Gilmour Camilleri, Chief Economist at the Malta Fiscal Advisory Council, was invited to participate in "Negozju Bla Fruntieri", a programme produced by the Malta Business Bureau in collaboration with RTK 103. During the discussion, he addressed the reformed EU Economic Governance Framework and its implications for businesses operating in Malta.
The programme can be accessed via the following link:
Negozju Bla Fruntieri Season 1 Episode 12 - Gilmour Camilleri (Malta Fiscal Advisory Council) Negozju Bla Fruntieri is a program by the Malta Business Bureau in collaboration with RTK103 with the support of the Energy and Water Agency. ...
📘 MFAC publishes its “Assessment of the Fiscal Forecasts within the Draft Budgetary Plan 2026”
On 18 December 2025, the Malta Fiscal Advisory Council (MFAC) submitted its endorsement report to the Minister for Finance, confirming that, based on the data available at the time, it endorsed the government’s fiscal forecasts for 2025 and 2026 as presented in the Draft Budgetary Plan 2026 (DBP26).
Key highlights:
📌 Malta is close to reducing its deficit below the 3% of Gross Domestic Product (GDP) threshold and the debt ratio is projected to remain well below the 60% reference value throughout the forecast horizon.
📌 The Council expresses concern that Malta has significantly exceeded its expenditure commitments under the Medium-Term Fiscal Structural Plan (MTFSP) and Excessive Deficit Procedure (EDP), largely due to exceptional spending in 2024. The projected growth beyond the recommended expenditure ceiling is occurring despite that Malta is benefiting from the European Union's (EU) most flexible limit and strong economic growth.
📌 The MFAC notes that for 2025, downside risks to revenue are broadly offset by similar risks on the expenditure side, resulting in an overall neutral risk to the deficit. Looking ahead to 2026, risks shift towards a higher-than-projected deficit due to weaker-than-expected revenue and potential upward pressures on expenditure.
The Council also issued four strategic recommendations:
1️⃣ Adhering to the expenditure ceilings to strengthen fiscal sustainability.
2️⃣ Prioritising sustainable fiscal consolidation, especially in times of favourable economic conditions.
3️⃣ Fiscal policy as a strategic enabler to address long-term structural economic challenges.
4️⃣ The transposition of the revised EU economic governance framework into national legislation.
📄 Full report is available here:
17/12/2025
Malta’s strong economic growth no longer automatically allows for higher government spending. Under the new EU Economic Governance Framework, adhering to expenditure ceilings requires strict fiscal discipline and a strategic pivot towards export-led growth to secure long-term competitiveness.
✍️ Gilmour Camilleri , Chief Economist at the Fiscal Advisory Council , shares these insights in his article published in the Malta Business Bureau’s publication, Strategic Outlook 2.0.
👉 Read the full article and more in Strategic Outlook 2.0.
https://mbb.org.mt/publications/strategic-outlook-2-0/
15/12/2025
The Malta Fiscal Advisory Council (MFAC) is pleased to have contributed to the Malta Business Bureau’s Strategic Outlook 2.0.
In its contribution, authored by MFAC’s Chief Economist Gilmour Camilleri , the article outlines the implications of the new EU Economic Governance Framework for Malta and for Maltese businesses and SMEs. The new rules place greater emphasis on a binding expenditure growth ceiling, meaning that strong economic growth will no longer automatically translate into additional fiscal space.
Although Malta has the highest permitted expenditure growth rate in the EU (5.9%), this remains below historical trends and will require greater fiscal discipline and prioritisation. For businesses, the framework highlights the importance of medium-term policy planning and continued focus on investment in productivity, innovation, digitalisation, the green transition, and export-led growth.
MFAC thanks the Malta Business Bureau for facilitating this important discussion on the New EU Economic Governance Framework and its implications for Malta.
14/12/2025
Last week, our Chief Economist, Gilmour Camilleri, and Senior Economist Andrea Mallia participated in a workshop hosted by Cambridge Econometrics as part of our ongoing collaboration under the European Commission’s SG Reform project to develop an integrated macroeconomic–fiscal model. This workshop marks a notable step forward since Cambridge Econometrics’ visit to Malta, providing the opportunity to resolve the technical issues that had emerged in the interim.
Colleagues from the National Audit Office of Lithuania (Valstybės kontrolė – aukščiausioji audito institucija), who are currently developing a similar model were also present. This joint participation provided a collaborative environment for productive group exchanges and valuable knowledge sharing.
We remain grateful for the continuous support provided by the team at Cambridge Econometrics as we work to strengthen our analytical tools and enhance our institutional capabilities.
14/12/2025
The Malta Fiscal Advisory Council’s (MFAC) economists Maria Giordmaina and Maria Grazzja Briffa attended the Seventh Annual Conference of the European Fiscal Board on behalf of the Council. This year’s conference, titled “Sustainability in times of national escape clauses”, brought together leading policymakers, economists, and experts to discuss how to safeguard fiscal responsibility while navigating the complexities posed by national escape clauses.
Various related studies were presented, including a paper contributed to by MFAC’s Chief Economist Gilmour Camilleri and Senior Economist Christian Xuereb, titled “The Role of Communication for EU Independent Fiscal Institutions in Times of Escape Clauses.”
The conference also featured a panel discussion on policy implications with representatives from the Network of EU Independent Fiscal Institutions, the European Stability Mechanism, the European Central Bank and Fitch Credit Rating Agency.
📘 MFAC publishes its “Assessment of the Macroeconomic Forecasts within the Draft Budgetary Plan 2026”
On 15 October 2025, the Malta Fiscal Advisory Council (MFAC) submitted its endorsement of the Government’s macroeconomic forecasts for 2025–2026 published in the Draft Budgetary Plan 2026. This endorsement signifies that the MFAC assessed the forecasts to fall within its endorsable range.
Key highlights:
• Real GDP growth is expected at 4.1% in 2025 and 2026, following 6.8% in 2024
• Growth continues to be driven mainly by domestic demand
• Net exports are projected to weigh on growth in 2025 before recovering in 2026
• Risks for 2025 are tilted to the downside, while the 2026 outlook is more balanced. For both years, the MFAC has differing views regarding the composition of the underlying growth drivers. Indeed, the downside risks in 2025 mainly emanate from private consumption expenditure and investment.
The Council also issued two strategic recommendations:
1️⃣ Reduce reliance on domestic-demand-driven growth and advance a more export- and productivity-oriented model
2️⃣ Accelerate structural reforms in skills, innovation, digitalisation, and environmental sustainability. Also, fiscal policy should remain a strategic enabler of these objectives, facilitating productive investment and sustainable economic transformation.
📄 Full report is available here:https://mfac.org.mt/wp-content/uploads/2025/11/Assessment-of-the-Macroeconomic-Projections-within-the-DBP26.pdf
🎙️ Exciting News! 📊 Our Chief Economist was invited on radio programme 'Il-Polz taċ-Ċittadin', Radju Malta, to give his insights on the Budget 2026 presented by the Minister for Finance and the role of the Council in the budgetary process.
You can listen to the interview via the link below.
📢 In preparation for tonight’s Budget Speech, the Malta Fiscal Advisory Council (MFAC) confirms that it has given its ex-ante endorsement to the macroeconomic projections prepared by the Ministry for Finance as part of Malta’s Draft Budgetary Plan 2026, submitted to the European Commission on 15 October 2025.
In its endorsement, the Council noted that the balance of risks to GDP growth is tilted to the downside for 2025, while broadly balanced for 2026. It also pointed out that the Council holds different views from the Ministry on the composition of the underlying growth drivers.
The Council is currently finalising its full assessment report, which will be published soon.
📄 You can read the full endorsement letter here:
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