The Budget for the 2027 legislature was presented to the Maltese Parliament on the 26th of October 2026. The Minister for Finance described it as the most important Budget of his six years in the role. He highlighted Malta's continued resilience and the highest projected economic growth in the European Union. The economy grew by 4.7% in real terms in 2025, and growth reached 4.4% in the first half of 2026, compared with an EU average of 1.2%.
Against the backdrop of the war in Ukraine, tensions in the Middle East and disruption in the Strait of Hormuz, energy and transport costs have continued to rise. Despite this, Government confirmed that it will once again keep electricity, gas and fuel prices stable, at an expected cost of around €400 million in 2027. Inflation in Malta stood at 2.4% in September, against 3.8% in the euro area. It is forecast at 2.5% in 2026 and 2.7% in 2027.
Public finances also remained a central theme. Malta exited the EU excessive deficit procedure in June, and the deficit is targeted at 2.6% of GDP for 2027, below the 3.0% threshold. Debt is expected to remain stable at around 46.8% of GDP.
The Budget once again had a strong social focus, with a package of more than €121 million. It includes further increases in pensions, the continuation of the three-year income tax cut for families with children, and the payment of a tax-free Super Bonus of up to €1,000.
High on Government's agenda this year was a shift in Malta's economic model towards higher productivity and value added. The headline measure is a new 25% tax rate for small companies with a turnover of up to €1 million, which applies to profits they retain or reinvest. To share more fairly the pressure that economic growth puts on infrastructure, the Budget also introduces higher tourism eco-contributions and higher fees for work permits for third-country nationals.
For another year, there were no increases in income tax rates, VAT or social security contributions.
Click on the following link to read the full overview: Malta Budget 2027
