Understanding the Maltese economy

Abstract

Over the decades that followed Independence in 1964, the Maltese islands have witnessed fundamental changes in the financial and economic landscape, including accession to the European Union in 2004 and the subsequent adoption of the euro as the national currency in 2008. Despite its small size and its dependence on foreign trade, Malta has managed to outperform its peers in the face of the global economic downturn. Structural adaptation has played a key role in Malta’s rapid growth and its consistent resilience to external shocks. Structural change has been visible in the labour market. Employment market imbalances that half a century ago were relieved through outward migration are now resolved by inward migration – mostly from EU countries – alleviating resource and size constraints.